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HOFFMAN ESTATES, IL-Shareholders of both Kmart Holding Corp. and Sears, Roebuck & Co. both approved the $13-billion merger between the two companies that will create Sears Holding Corp. The new entity, which will operate about 3,500 stores, will start trading on the Nasdaq under the symbol "SHLD" on March 28.
About 88% of the votes cast by Sears shareholders, or 69% of the company's total outstanding shares, voted in favor of the merger. At Kmart, 99.9% of those who voted were in favor, representing 69% of shares outstanding. Company officials first announced the transaction in November.
The merger will allow Sears to convert about 400 Kmarts into its nameplate stores over the next three years in efforts to expand that chain's off-mall growth, according to Kmart's annual report, released earlier this month. This expansion will better place Sears in a position to compete with Wal-Mart, Target, Kohl's and others, the report says. Sears Holding will also likely divest some stores, but no numbers have been released as to how many units will be sold or closed.
Sears has pushed its off-mall growth in recent years. Its purchase of the 45 Kmarts last year for $576 million was an attempt to do that, and last year Sears started rolling out its off-mall Sears Grand concept, which is a stand-alone department store that also sells food. The retailer now operates four of those units.
Earlier in the week Vornado Realty Trust executives released a statement saying that they supported the proposed merger. In November, Vornado bought a 4.3% stake in Sears, just a couple weeks before its merger with Kmart was announced. The REIT currently owns nearly 1.2 million shares of Sears' stock and will elect to receive stock of the merged company as compensation.
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