Kmart Holding Corp. and Sears, Roebuck & Co. agreed to merge in an $11
billion transaction.
The companies said the deal will create the third-largest U.S. retailer with
$55 billion in annual revenue, 2,350 full-line and off-mall stores, and
1,100 specialty retail stores.
The new entity, to be called Sears Holdings Corp., will be headquartered in
Hoffman Estates, Ill. Kmart will continue to have a significant presence in
Troy, Mich.
Kmart Chairman Edward Lampert will be the chairman of Sears Holdings, while
Sears Chief Executive Alan Lacy will be vice chairman and CEO of the new
company. "The merger will enable us to manage the businesses of Sears and
Kmart to produce a higher return than either company could achieve on its
own,'' Mr. Lampert said in a statement.
The merger, expected to close by the end of March, is subject to approval by
Kmart and Sears shareholders, regulatory approvals and customary closing
conditions.
Under the terms of the agreement, Kmart shareholders will receive one share
of new Sears Holdings common stock for each Kmart share. Sears, Roebuck
shareholders will have the right to elect $50 in cash or 0.5 share of Sears
Holdings, valued at $50.61 based on Kmart's closing price Tuesday.
New York Stock Exchange-listed shares of Sears closed Tuesday at $45.20,
down $1.10, or 2.4%. Nasdaq shares of Kmart closed at $101.22, down $1.51,
or 1.5%.
Separately, Kmart said it swung to a third-quarter profit and has a solid
base for improvement in the fourth quarter, as the discount retailer
benefits from the advertising, promotional and inventory changes instituted
in 2003. Kmart reported a net profit of $553 million, or $5.45 a share, for
its third quarter, compared with a net loss of $23 million, or 26 cents a
share, in the year-earlier period.
Excluding asset-sale gains primarily for transactions with Home Depot Inc.
and Sears, Kmart's adjusted earnings totaled $59 million, or 59 cents a
share. A year earlier, Kmart had an adjusted loss of $24 million, or 27
cents a share.
Total sales fell 14% to $4.39 billion from $5.09 billion. Same-store sales
fell 13%.
Kmart expects to end the year with more than $3.1 billion in cash, excluding
$400 million the company expects to receive from the Sears transaction.
http://online.wsj.com/article/0,,SB110068961640976558,00.html
Also assign:
http://www.dailyherald.com/business/business_story.asp?intid=38308367
http://www.cbsnews.com/stories/2004/11/17/national/main656127.shtml
http://www.forbes.com/business/commerce/2004/11/17/cx_vc_1117kmartpack.html
[Forbes.com has a musical ad intro that will wake 'em up].
http://quote.bloomberg.com/apps/news?pid=10000006&sid=a5E.HNmQSBgs&refer=hom
e