Breaking: Sears and K-Mart to merge

[TheWebHead]

just flashed on CNBC $11 billion deal.

Kmart Holding Corporation (NASDAQ: KMRT) and Sears, Roebuck and Co. (NYSE: S) announced today they have signed a definitive merger agreement that will combine Sears and Kmart into a major new retail company named Sears Holdings Corporation. Sears Holdings will be the nation's third largest retailer, with approximately $55 billion in annual revenues, 2,350 full-line and off-mall stores, and 1,100 specialty retail stores.

Both Sears, Roebuck and Kmart have made significant strides in transforming their organizations, and the merger will further accelerate this process for both companies. Sears Holdings will be headquartered in Hoffman Estates, IL, and Kmart will continue to have a significant presence in Troy, MI. The combined business will have a broader retail presence and improved scale through a national footprint of nearly 3,500 retail stores. The combined company will also benefit from improved operational efficiency in areas such as procurement, marketing, information technology and supply chain management.

Under the terms of the agreement, which was unanimously approved by both companies' boards of directors, 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 $50.00 in cash or 0.5 shares of Sears Holdings (valued at $50.61 based on yesterday's closing price of Kmart shares) for each Sears, Roebuck share. Shareholder elections will be prorated to ensure that in the aggregate 55 percent of Sears, Roebuck shares will be converted into Sears Holdings shares and 45 percent of Sears, Roebuck shares will be converted into cash. The current value of the transaction to Sears, Roebuck shareholders is approximately $11 billion. The transaction is expected to be tax-free to Kmart shareholders and tax-free to Sears, Roebuck shareholders to the extent they receive stock.

Edward S. Lampert, chairman of Kmart, will be the chairman of Sears Holdings. He will be joined in an Office of the Chairman by Alan J. Lacy, current chairman and chief executive officer of Sears, and Aylwin B. Lewis, current president and chief executive officer of Kmart. Mr. Lacy will be vice chairman and chief executive officer of Sears Holdings; Mr. Lewis will be president of Sears Holdings and chief executive officer of Sears Retail. Glenn R. Richter, currently executive vice president and chief financial officer of Sears, Roebuck, will be executive vice president and chief financial officer of Sears Holdings. William C. Crowley, currently senior vice president - finance of Kmart and a Kmart Board member will be executive vice president, finance and integration of Sears Holdings.

http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20041117005358&newsLang=en

[ogradda]

1. wow

that's weird.

[liberal N proud]

2. I heard they were talking weeks ago!

I think then it was that Sears was going to buy hundreds of K-Mart stores.

[NashVegas]

3. link, please?

..

[bobbieinok]

4. I guess Sears will be the primary partner...I like KMart much better

[warrens]

25. Actually, it looks like Kmart will be calling the shots

This has possibilities, but overall, it's more likely to result in chaos.

[ClintonTyree]

5. Great................

now we'll have another mega-company trying to outWal-Mart Wal-Mart. This could only mean bad things for the workers of America.

[AP]

23. More competition for WalMart can only help the economy.

[NorthernSpy]

6. S-Mart

The big boxes just keep getting bigger. Verily, they are a scourge upon the land.

[jdj]

15. well, Walmart needs to have it's ass kicked.

and cities are starting to stand up to the boxes, one in the Charlotte area was only agreed on after major changes in the design were made so that it doesn't look like a wally-witch, it has to blend into the shopping center so it can be re-used by another business when they inevitably close and move 2 miles down the road.

My hope is that Wal-mart will have to draw in and downsize when faced with losses from a significant competitor.

They seem to be in the habit of opening up a store, gaining major profits, and then closing and moving a few years later. With every loss they are able to write-off, I guess that is part of the plan.

[NewYorkerfromMass]

20. actually, cities are now embracing the boxes

NYC is bringing them in in droves- Home Depot, et al are building in urban settings. Might as well head off further exurban development.

[Catchawave]

7. And they're keeping Martha products....

Good news for her company, Sears will now sell her stuff too. Hope this means craftsman tools are coming to Kmart.

[Ronnie]

12. I've bought Martha's paint

at Sears.

[bleedingheart]

8. Here comes the battle of the MegaCorps...Walmart vs Sears/KMart

This is going to get good....

[AG78]

21. Just wait

until they have their own private military forces.

[lil-petunia]

9. To improve service to you, we are laying off 30% of our staff.

Isn't that the punch line? Every merger, regardless of the field, has reesulted in a loss of jobs, a loss of competition, and a worse result for Mr. and Mrs. Consumer.

Case in point. Just how few radio, TV, and Cable stations are independent? And look at the quality of what they portray as news.

[jdj]

17. well, for K-mart it is either that or close.

And I can't get hired at any of these places because I fail the personality tests everytime. "Do you think marijuana is worse than alcohol?" No, not really, even though I'm totally clean and sober and have been since '92.

But people who lie their asses off on these tests are the ones that get hired. K-mart was going DOWN and I shop at K-mart for things I can't get elsewhere, I have always preferred it to Walmart even wally-wart was still pretending to be patriotic with that bye-a-murikan facade.

[durablend]

19. Like it or not, Walmart would've crushed them both individually

Eventually...they might have a chance to stay around with this merger if they spend the resources on infrastructure improvements (which they need to).

I think the intention is going to be more towards siphoning Target's base and not Walmart's as they're not going to be able to compete strictly on price (they've already tried and failed).

[Bobbie47]

10. I like it

in a smaller community this should help KMart keep people from shopping at a larger community. A lot of our tax base goes to the near by towns and the malls.

[Kahuna]

11. I already knew that. My neice works at KMart and she's about..

to be out of a job because of the "merger."

[johnnyrocket]

13. Response to Wal-Mart's behemoth, they had no choice...

not sure its going to work though. I wonder if they'll buy Toy-R-Us too?

[verdalaven]

14. Killing the Long Time Employees

My sister-in-law has worked for k-mart for 28 years. Her store is becoming a Sears and she was informed last week that her pension is gone as a result. She cannot transfer to save her pension, she cannot do anything to save her pension.

She was going to retire in two years.

In other words, she is screwed.

[jdj]

18. well, that totally sucks.

If I were her I'd wrangle up one of those Kerry lawyers that were supposed to be watching this election and ask him to make himself useful and bring a suit.

Pensions are dead all over, I guess.

[goodhue]

16. Sears already bought a bunch of urban K-Marts a few weeks back

K-mart stores to be opened as Sears sometime early in the new year.

[AP]

22. Target stock will go down today.

[bobthedrummer]

24. Wow. I hope they don't end-up like Montgomery Ward's though.

The experienced employees are going to suffer, as others have noted-as well as middle management.

[DainBramaged]

26. Pure crap sold at high prices, best of both worlds for shareholders

Sears' prices suck, Kmart sells the worst of the worst. Why is this important? It only benefits shareholders, not the public at large. And you can bet they'll find reasons to lay off thousands of the little people while claiming they are 'helping' the community.

America, we once were a Nation, now we're just one big store.

[tjwash]

27. kick

nt

[greekspeak]

28. So what are they going to call the new stores?

Sears Mart and K-Buck?

[w4rma]

29. Its my understanding that Sears instigated a policy recently that laid off

the employees who had been working there the longest, in favor of employees who were only looking for short term employment.