Business & Finance
In a megamerger of big-name retailers, Kmart Holding Corp. and Sears, Roebuck & Co. announced that they'll join forces in a deal valued at $11 billion. The almost 3,500 Kmart and Sears outlets will continue to operate under their current names but will report to a new entity to be known as Sears Holding Corp. The merger will make the new company the No. 3 US retailer behind Wal-Mart and Target Corp. and, according to Kmart chairman Edward Lampert, should produce a "higher return than either company could achieve on its own." Sears has slumped in recent years, while Kmart has bounced back from bankruptcy. The combined company will be based at Sears headquarters in the Chicago suburb of Hoffman Estates, Ill.
The Association of Flight Attendants, a 46,000-member union with workers at 26 airlines, said Tuesday it will conduct a strike vote at four carriers: United, US Airways, ATA, and Hawaiian Airlines. Results are expected by year's end. The action is being taken, the union said, because airlines are using the threat of bankruptcy to squeeze its members via ever-decreasing wages, longer working hours, and reduced rest time. The union's board wants strike authorization so it can respond to bankruptcy court proceedings, which could grant airlines the right to cancel union contracts and impose deep pay cuts.
Shareholders in General Property Trust pulled the rug out from under the company's management, rejecting a $5.6 billion takeover bid that the latter had accepted in August from rival Lend Lease Corp. Both companies are based in Sydney, Australia, and their merger would have created the nation's second-largest operator of shopping malls, hotels, office towers, and other commercial properties. Lend Lease said it wouldn't increase its offer. The rejection leaves on the table a $5.7 billion bid for GPT by a third player in Australia's real-estate market, Stockland Trust.
In layoff news:
• Pharmaceutical giant Schering AG said it will cut another 1,250 jobs by the end of next year, on top of the 600 previously announced. The company is based in Berlin.
• General Motors confirmed rumors that it will close its van-assembly plant in Baltimore, which employs 1,100 people. How long the facility continues to operate next year will be determined by sales of Chevy Astro and GMC Safari vans, company executives said.
• The maker of Char-Broil grills announced it will shift that process to China over the next two years, although "we don't know how many" jobs will be lost as a result. W. C. Bradley Co. of Columbus, Ga., the largest grillmaker in the US, has 840 full-time employees there and in Opelika, Ala., plus 1,000 others who are hired on a seasonal basis.