Federated completes $11.9 billion acquisition of May, plans eight more store divestments
Friday, September 2nd 2005, 10:22 am
By: News On 6
CINCINNATI (AP) _ Federated Department Stores Inc. on Tuesday said it completed its $11.9 billion acquisition of rival May Department Stores Co., forming a retail company with more than 1,000 stores and $30 billion in annual sales.
``Two great organizations have come together, and we see tremendous opportunity ahead,'' said Terry J. Lundgren, Federated's chairman, president and chief executive.
Federated said it will operate all of May's stores under their existing names at least through the end of the year. Next fall, Federated plans to convert most May locations to its Macy's nameplate. Federated also owns the Bloomingdale's, Filene's and Famous-Barr chains.
The company also said it plans to divest an additional eight duplicate stores in California, Massachusetts and New York in 2006, and reiterated a promise that there will be no layoffs or job cuts before March 1. It had previously said it planned to divest 68 stores.
New York Attorney General Eliot Spitzer on Tuesday said the settlement will require the selling of three department stores in New York: In the Walt Whitman Mall in Huntington Station and the South Shore Mall in Bayshore, both on Long Island; and in The Crossgates Mall in the Albany suburb of Guilderland.
May shareholders received $17.75 in cash and 0.3115 share of Federated stock for each outstanding May share, bringing the deal's total value to about $11.87 billion based on Monday's closing prices.
Federated also owns Foley's, Hecht's, Kaufmann's, Lord & Taylor, L.S. Ayres, Marshall Field's, Meier & Frank, Robinsons-May, Strawbridge's, The Jones Store, David's Bridal, After Hours Formalwear and Priscilla of Boston.