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Kmart, Sears in $11B Deal

HOFFMAN ESTATES, IL-The deal would create the nation's third-largest retailer behind Wal-Mart and the Home Depot.

By Ian Ritter | Updated on November 17, 2004

HOFFMAN ESTATES, IL-Two of the nation’s best-known retailers, Kmart and Sears, Roebuck & Co., plan to merge in an $11 billion deal. Company officials say the two would form Sears Holding Corp, the third-largest retailer US retailer behind Wal-Mart and the Home Depot, with about 3,500 stores and annual revenues of about $55 billion.

The deal would give Kmart stockholders one Sears Holding share. Sears stockholders would have the right to collect $50 in cash for each of their shares, or 0.5 shares of Sears Holding. The company would be based here, where Sears currently has its headquarters, and Kmart would keep a “significant presence” at its Troy, MI, home base. The parties expect to close the deal by the end of March.

At the closing of the transaction, Edward S. Lampert, Kmart’s chairman, will become chairman of Sears Holding. Alan J. Lacy, Sears’ chairman and CEO, and Aylwin B. Lewis, Kmart’s president and CEO, will join him in an Office of the Chairman. Both companies will keep the names of their chains.

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