FEDERATED AND MAY REACH DEAL

CINCINNATI – Federated Department Stores Inc., operator of Macy’s and Bloomingdale’s, has reached a deal to buy rival May Department Stores Inc., a source familiar with the deal told the Associated Press yesterday.

Exact terms of the deal could not be determined.

The executive, who spoke on condition of anonymity, said Federated will pay less than $36 for each May share under the deal, which will be formally announced today.

The deal would be worth a total of about $10.4 billion, with Federated paying about $35.50 in cash and stock for each May share, according to the Washington Post. That would be a 15-cent premium to May’s closing price of $35.35 Friday on the New York Stock Exchange, after its shares rose $1.50, or 4.4%, that day.

The boards of the two companies approved the deal over the weekend, according to the Post, which cited executives close to the merger in a story published on its Web site last night

The deal would bring together Cincinnati-based Federated with the company known for its Marshall Field’s and Lord & Taylor chains, creating a company with 1,000 stores and $30 billion in annual sales.

Messages left seeking comment last night from a Federated spokeswoman and several members of the company’s board were not immediately returned.

The merger, which still needs to be approved by shareholders and regulators, comes as retailers look to consolidate in order to reduce advertising and other costs while gaining bargaining power with suppliers. Just last November, Kmart Holding Corporation agreed to buy Sears, Roebuck & Company for $11.5 billion.

Federated and St. Louis-based May have discussed a possible merger on and off for a couple of years, but speculation heated up when May’s chief executive and chairman, Gene Kahn, abruptly left in January. That cleared the way for Federated’s chairman and CEO, Terry Lundgren, to head the combined entity.

May stock has been rising in recent weeks in anticipation of a deal, including a 4% jump, or $1.50 a share, to close at $35.35 in trading Friday on the New York Stock Exchange. The stock has ranged in price to $36.48 from $23.04.

Federated shares closed at $56.79 on Friday, near the upper end of its 52-week range of $42.80 to $59.91.

– Associated Press

QATAR

Qatar Petroleum and Exxon-Mobil yesterday announced the launch of a huge $12.8 billion liquefied natural gas project in Qatar that aims to ferry gas to Britain for the next 25 years. Qatar Petroleum officials dubbed Sunday’s deal the world’s largest-ever liquefied natural gas development effort and largest energy financing, involving $7.6 billion in investments from 57 different institutions, including Islamic banks.

– Associated Press