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Kaufhof, Karstadt merger agreed
Posted on Tuesday, 11 September 2018 13:17
German department store chains Kaufhof and Karstadt are to join forces in a merger.

The companies announced a deal following earlier reports by Reuters, which cited people with knowledge of the matter as saying terms has been agreed.

Under the transaction, the two businesses will be combined into a single entity, which will subsequently be operated as a joint venture by their respective current owners, Signa Holding (50.01 per cent) and Hudson’s Bay (49.99 per cent).

The parties noted that the move will result in the creation of a leader in its field, with some 243 locations, a broad ecommerce platform and 32,000 employees.

Current Karstadt boss Dr Stephan Fanderl will serve as chief executive of the combined business.

In line with the acquisition’s terms, Signa will take over 50.0 per cent of Hudson’s Bay’s portfolio of European real estate.

Commenting on the planned combination, Hudson’s Bay chief executive Helena Foulkes said it is a strategically sensible decision and will strengthen both existing businesses while improving their offerings to clients.

No details of when completion can be expected to follow have been disclosed at this time.

This is not the first time the parties have been linked; back in September 2017, Reuters reported that Hudson’s Bay could sell Kaufhof.

Signa was subsequently named as a potential buyer and made a EUR 3.00 billion offer for the company in November of last year.

However, the approach was ultimately rejected by the firm, saying it was not in the best interests of shareholders and undervalued the business, while proof of financing was also not provided.

Zephyr, the M&A database published by Bureau van Dijk, shows there have been 92 deals worth a combined USD 3.93 billion targeting department store operators announced worldwide during 2018.

The largest of these was worth USD 567.61 million and involved Thomas Lau Luen Hu and other investors taking their combined share of Cayman Islands-based Lifestyle International Holdings from 29.3 per cent to 52.4 per cent.

© Zephus Ltd