St. Louis, MO, Jun. 9--In a deal valued at $3.2 billion, May Department Stores has agreed to buy Marshall Field's from Target Corp.
Also included in the all-cash deal were nine Mervyn's stores in the Twin Cities area which Target plans to close in late July. May successfully outbid Federated Department Stores Inc. in a showdown between two of the biggest U.S. department stores.
The deal marks the end of a sale process that began in March, when Minneapolis-based Target announced it had hired Goldman Sachs to review "strategic alternatives" for Marshall Field's, an upscale department store chain with 62 outlets, including a possible sale. Though a landmark in Chicago, Marshall Field's has been a drag on Target, one of the nation's most successful retailers.
Under terms of the deal, Target will sell May the 62 Marshall Field's stores, three distribution centers and about $600 million in credit card receivables.
Marshall Field's gives May a chance to spread its wings, gaining presence in Illinois, Indiana, Minnesota, Michigan, North Dakota, Ohio, South Dakota and Wisconsin.
Target said its "strategic review" of Mervyn's, a middle-market department store with 266 stores in 14 states, is still underway.
