Target inks deal to sell Mervyn's
July 30, 2004,
MINNEAPOLIS — Target Corporation has reached an agreement to sell its Mervyn's business unit to an investment consortium for approximately $1.65 billion in cash.
Mervyn's, based in the San Francisco Bay Area, has 257 stores in 13 states, primarily in the West and South. In 2003, Mervyn's generated $3.6 billion in revenue and $160 million in pretax segment profit. The company’s home textiles sales in 2003 were $340 million.
The transaction is subject to regulatory approval and is expected to be completed shortly after approval is obtained. The sale is expected to result in an estimated gain in the range of $270 million pre-tax, or approximately 18 cents per share, in the third quarter.
Bob Ulrich, chairman and CEO of Target Corporation, said, "We believe that the sale of Mervyn's as an ongoing business reflects our long-term commitment to create substantial value for our shareholders over time and enhances the opportunity for all of our stakeholders, including our team members, guests and communities, to enjoy continued success for many years."
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