Shareholders Approve Sears-Kmart Deal

Shareholders signed off yesterday on Kmart Holding Corporation’s $12.3 billion acquisition of Sears, Roebuck and Company, clearing the way for the two struggling rivals to combine into the nation’s third-biggest retailer.Final approval came in back-to-back meetings at Sears’ headquarters, and company officials said the deal would close as soon as yesterday afternoon.Barring a last-minute hitch, Sears’ sprawling Hoffman Estates, Ill., headquarters will now house a new retail powerhouse named Sears Holdings Corporation with $55 billion in revenue, 3,800 stores and an uncertain future under Edward Lampert – Kmart’s chairman and the billionaire hedge-fund manager who engineered the deal.Sixty-nine percent of Kmart shareholders voted to approve the deal in results announced at a brief and sparsely attended meeting at the headquarters building. Less than two hours later, Sears said its shareholders also voted 69% in favor of the deal.“The merger is now approved,” Sears’ chief executive, Alan Lacy, told the crowd of about 200 people, many of them retired Sears employees who vociferously protested the deal and the 119-year-old retailer’s acquisition by Kmart.“Sears Holdings intends to be a great company and a great retailer,” said Mr. Lacy, responding to their angry complaints and fears the department store company’s assets would be sold off to raise cash.Mr. Lampert, who employed just that strategy in rescuing Kmart from bankruptcy, focused instead on the combined company’s retail prospects. “It’s an opportunity to transform two companies that once were great – to transform them into a great company relative to the 21st century,” Mr. Lampert told reporters after the meetings.Yesterday marked the last day of trading for Sears’ stock, Mr. Lacy said. The merged company is expected to begin trading on the Nasdaq on Monday.The deal creates the no. 3 American retailer and brings together Sears’ top brands Craftsman and Kenmore with Kmart’s successful Martha Stewart and Joe Boxer product lines. It also furthers Sears’ strategy of moving away from shopping malls to the off-mall sites that Kmart stores typically occupy.Mr. Lampert, whose investment firm controls Kmart and is Sears’ largest individual shareholder, has orchestrated a financial turnaround at Troy, Mich.-based Kmart since it emerged from bankruptcy in 2003. The discounter turned a $1.1 billion profit last year, although it was largely the result of selling off real estate as sales continued to decline.

Shareholders Approve Sears-Kmart Deal

Shareholders Approve Sears-Kmart Deal

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