Kmart-Sears merger approved

HOFFMAN ESTATES, Ill. — Kmart bought Sears, Roebuck and Co. for $12.3 billion on Thursday, combining two faded retail icons whose sales have been declining for years into the nation's third biggest retailer with $55 billion in annual sales.

Shareholders signed off on the deal in separate meetings at Sears' suburban Chicago headquarters, which now becomes the base for a company that adopts the name Sears Holdings Corp. It trails only Wal-Mart Stores Inc. and Home Depot Inc. among U.S. retailers.

The votes capped off the stunning proposal unveiled four months earlier by Kmart chairman Edward Lampert, the billionaire hedge-fund manager who was the largest individual shareholder in each company.

Lampert, who helped Kmart, based in Troy, Mich., turn a $1.1 billion profit last year with the aid of real-estate transactions, denied he has a big sell-off in mind for Sears assets and said the new company "goes beyond being an investment."

"It's an opportunity to transform two companies that once were great — to transform them into a great company relative to the 21st century," he told reporters at a news conference after the meetings.

"I think there's a presumption that you're going to see a lot of store closings. That's a wrong presumption," he said. "Our program is to keep as many stores open as we can."

Contending he has been unfairly labeled as a sell-off specialist, he also denied the company has put the Lands' End casual clothing chain on the market, as an industry publication reported earlier this month.

"Lands' End isn't for sale," the 42-year-old Lampert said. "It's a great American brand, and I think it's a brand that we could run very, very well."

The merger also brings together some other powerful brands that have succeeded while their companies' retail results have sagged, among them Craftsman tools, Kenmore appliances and, from Kmart, Martha Stewart, Jaclyn Smith and Joe Boxer.

Employees have been concerned about widespread job cuts when the new company moves to close stores and convert hundreds of Kmart stores this year to the new Sears Essential convenience-oriented format. But officials said that while some layoffs will be announced by the end of April from among the 5,000 people working at the two firms' headquarters, the vast majority of the work force of 400,000 will keep their jobs as Sears Holdings focuses on improving retail.

"We are determined to be successful," Lampert said. "We will protect the assets of this company."