Kmart Shareholders OK Sears Deal

Edward Lampert, chairman of Kmart, left, Aylwin Lewis, president of Kmart, center, and Alan Lacy, CEO of Sears, right, join hands during an announcement of a merger between Kmart and Sears in New York Wednesday, Nov. 17, 2004. Kmart and Sears announced today they have signed a merger agreement that will combine the companies into a major new retail company named Sears Holdings Corporation.
Kmart Holding Corp. shareholders approved the acquisition of Sears, Roebuck and Co. on Thursday in a $12.3 billion deal executives hope will create a retail powerhouse while helping to reverse years of lagging sales.

The Kmart shareholders meeting at Sears headquarters in suburban Chicago was perfunctory, lasting just five minutes. Sears shareholders were scheduled to vote on the deal later Thursday.

Kmart Chairman Edward Lampert unveiled the proposed pairing of longtime industry rivals four months ago. Barring a last-minute hitch, Sears' sprawling headquarters will now house a new retail company named Sears Holdings Corp. with $55 billion in revenue, 3,800 stores in the United States and an uncertain future.

The company said that because of timing restrictions on settlements, anyone trading Sears shares on the NYSE Thursday could not elect to choose stock in the new company for their shares — one of the two options available. As a result, the company will pay the pre-arranged price of $50 each for those shares.

Thursday marked the last day of trading for Sears' stock, Lacy said. The merged company is expected to begin trading on the Nasdaq on Monday. Company officials did not specify when the deal would close, but acknowledged it would do so as soon as Thursday.

The deal will create the third biggest U.S. retailer behind Wal-Mart Stores Inc. and Home Depot Inc. It also furthers Sears' strategy of moving away from shopping malls to the more profitable off-mall sites that Kmart stores typically occupy.