Kmart and Sears Announce $11 Billion Merger to Form Third-Largest U.S. Retailer

Kmart and Sears, Roebuck and Co. unveiled a surprise merger valued at $11 billion in November 2004, creating a retail group that will rank third in the United States. The combined company, to be named Sears Holding Corporation, will operate nearly 3,500 stores and generate roughly $55 billion in annual revenue.

Kmart chairman Edward Lampert, who rescued Kmart from bankruptcy just 18 months earlier, will lead the new entity. The two chains expect to realize $500 million in annual cost savings by 2008, with the deal targeted for completion by March 2005.

Under the terms approved unanimously by both boards, Kmart shareholders will receive one share of Sears Holdings for each share they hold. Sears, Roebuck shareholders may choose either $50 in cash or 0.5 shares of the new company per existing share.

Together the firms employ roughly 345,000 workers across the U.S. and Canada. The merger reshapes a struggling retail sector long dominated by Wal-Mart, whose 2003 sales reached $256 billion across more than 3,600 domestic stores, well ahead of the newly formed rival.

Historical summary. TurkishPress restated this AFP wire report, first published in November 2004, in its own words.