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Federated Completes Merger With MayPOSTED August 30, 2005 CINCINNATI -- Federated Department Stores announced it has completed its merger with The May Department Stores Company and will close an additional six stores in NY, Massachusetts and California. Under terms of the merger agreement, May Company shareholders as of the time of merger on Aug. 30, 2005, will receive $17.75 in cash and 0.3115 shares of Federated common stock for each share of May Company common stock. "Today is a landmark day in the history of our company. Two great organizations have come together, and we see tremendous opportunity ahead," said Terry Lundgren, Federated's chairman, president and chief executive officer. "We see opportunity to bring distinctive fashion and affordable luxury to our customers, opportunity for our people to grow and develop, opportunity to increase shareholder value, and opportunity to be a stronger partner for our communities. "We will be meeting with the May Company organization and continuing to learn more about its business so we can make the best possible long-term decisions," Lundgren said. "In the short term, we are firmly focused on serving customers and delivering results through the holiday selling season." Federated expects to operate all May Company stores under their existing nameplates at least through the end of 2005. Conversion of most May Company locations to the Macy's nameplate is expected in fall 2006, consistent with Federated's announcement of July 28. Also as previously announced, divestiture of duplicate May Company and Macy's locations will begin in 2006. The company reiterated its pledge to May Company associates
that there will be no workforce reductions or job eliminations
as a result of the merger prior to March 1, 2006. These seven locations join a list of 68 stores nationwide that Federated announced on July 28 it intends to divest as part of a plan to convert May Company nameplates nationwide to Macy's. The 75 stores currently identified for divestiture accounted for approximately $2.1 billion in 2004 sales. Federated reiterated its intention to comply with all existing lease and operating agreements. In addition, Federated confirms that it intends to divest either the Filene's or Macy's East store in downtown Boston. The specific store to be divested has not yet been determined. Once duplicate stores are divested, their workforces will be integrated into nearby Macy's and/or Bloomingdale's stores. The company expects to employ all management personnel in good standing from all stores and to offer positions to the vast majority of associates. |
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