Saks owner to buy Germany's Kaufhof chain for $3.2 billion
By Matthias Inverardi
DUESSELDORF, Germany (Reuters) - Hudson's Bay Co (HBC.TO: Quote) is buying Germany's leading department store chain, Kaufhof, from Metro (MEOG.DE: Quote) for 2.8 billion euros ($3.2 billion), giving the Saks owner a launch pad to expand into Europe.
The deal, the largest German inbound M&A this year, comes as department stores start to enjoy a revival by investing in ecommerce in tandem with revamped flagship stores.
Hudson's Bay, whose shares rose as much as 13.4 percent, said it would sell at least 40 of Kaufhof's owned or partially owned properties to its real estate joint venture with Simon Property Group (SPG.N: Quote) for at least 2.4 billion euros.
The company said it expects to fund the Kaufhof deal from the proceeds of the sale of the real estate. Hudson Bay said it does not intend to issue equity and expects to incur limited additional debt.
Kaufhof's 120 stores occupy prominent locations in most major towns and cities, employing 21,500 staff and making sales of 3.1 billion euros. It also operates 16 stores in Belgium.
Hudson's Bay, founded in 1670, is the oldest continuously operating company in North America.
The company also operates the upmarket Lord & Taylor department store chain.
Under NRDC Equity Partners Chief Executive Richard Baker, who is now Hudson's Bay chairman, the group went on to buy U.S. luxury retail chain Saks Fifth Avenue in 2013 for $2.4 billion. Continued...