On the 17th of November, Sears Roebuck was acquired in a friendly merger with K-Mart Holdings Co.. The new entity will be called Sears Holdings. The merger worth an estimated 10.9 billion dollars was accomplished in a stock swap Sears stockholders are given the choice of receiving 50 dollars per share of Sears Roebuck common stock, or half a share Sears Holdings common stock per SRC common stock. K-Mart were to receive a share of SHC per K-mart share. K-Mart shares closed at 101&1/4 after the merger was announced.
The most surprising part of the merger is that K-Mart is actually the new parent company, considering that this company has just emerged from bankruptcy this news is quite a favorable assessment of K-Mart's management and there ability to turn what was K-Mart fall apart into a new retail powerhouse.
This new merged company promises to be able to give the number 2 retailer in the US (Home Depot) a run for their money and giant Wal-Mart reason to squirm. With strong exclusive brand names like, Craftsman Tools, and Martha Stewart Living, Sears Holding will slip strongly into the position of 3rd largest retailer in the Untied States.
3 comments:
The person that initiated this merger is a very bright individual and very much resembles Warren Buffett in that every year his return on investments are between 15 and 20 percentage points. Take a look at the past couple of Business Week magazine issues, there are some very interesting takes on this merger. I personally believe that it is a good idea.
-1 for spelling mistakes in Pramahaphil's post and Maudi's comment.
There isn't a lot of evidence in the finance literature that acquiring firms are making good decisions in mergers. That doesn't bode well for K-Mart. The shareholders of firm's being acquired usually do quite well.
Personally, I agree with Maudi: it's the blind leading the blind.
I saved 50% when I bought a Wide Hammered Cuff Bracelet in Sterli from Kmart store on Couponalbum.com.!!
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