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Shareholders OK Federated, May merger

With the deal one step closer to completion, Federated Department Stores Inc.'s top executive says he's eager to see rival May Department Stores Co. absorbed into his company, bringing together such names as Macy's and Bloomingdale's with Lord & Taylor and Famous-Barr.

"We believe that this play allows us to compete on a much bigger, broader, national scale," Terry J. Lundgren, Federated's chairman, president and chief executive, said Wednesday after shareholders of both companies overwhelmingly approved the $11 billion takeover in separate votes.


The purchase will result in "one superb national department store," John L. Dunham, May's chairman, president and chief executive officer, told about 50 shareholders at May's meeting in New York. "This is a good, bold, exciting move."

Lundgren told shareholders in a separate meeting that Federated has started customer research efforts to learn about views on May stores and names such as Marshall Field's as it develops the strategy for the combined company. Federated plans to eventually convert many May stores to Macy's as the department store operator accelerates its strategy of creating a nationwide brand that will allow it to expand marketing initiatives. That means May store nameplates such as Hecht's, Foley's and Kaufmann's could soon disappear.


Federated announced that 99.88 percent of its shares that voted favored the purchase; 81.3 percent of the company's outstanding shares were voted. For May, about 97 percent of shares that voted favored the move, according to May spokeswoman Sharon Bateman. She noted that 77 percent of outstanding shares were cast.

"We will be much stronger in every aspect of the business than either company could be independently," said Dunham.

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