Federated Department Stores Inc. and rival May Department Stores ended weeks of speculation that they'll join forces, confirming an $11 billion megamerger late Sunday. Fusing them roughly doubles Federated in size, giving it 1,000 stores that ring up about $30 billion in annual sales. The consolidation, which involves the assumption of $6 billion of May's debt, also provides them with more bargaining power with suppliers while reducing advertising and other costs - steps that are important in competing with Wal-Mart and other discounters such as Kmart (which bought Sears, Roebuck in November). Federated, which is based in Cincinnati, operates the Macy's and Bloomingdale's chains. May owns Marshall Field's, Lord & Taylor, and Filene's (but not Filene's Basement stores). May's headquarters are in St. Louis.
Yellow Roadway, the nation's largest trucking company, and rival USF Corp. announced Sunday that they will merge in a deal worth $1.47 billion. The combined company will have more than 70,00 employees and annual revenues in excess of $9 billion. The merger is subject to approval by regulators, although analysts said they don't foresee significant antitrust hurdles since the industry remains fiercely competitive. Less than two years ago, Yellow, of Overland Park, Kansas, doubled its size by acquiring Roadway. USF, which is based in Chicago, has a history of labor woes, but its strength is in next-day deliveries, especially within regional markets, the industry's fastest-growing segment.
Apax Partners LLP, the largest private equity firm in Europe, won the bidding for majority control of Travelex PLC of London, a company that offers global fund transfers and prepaid debit cards and operates foreign exchange booths at airports in more than 30 countries. Terms of the deal weren't disclosed, but Apax valued its new acquisition at $2.02 billion. Among the losing bidders: US buyout giant Kohlberg Kravis Roberts.
The merger between drug manufacturers Mylan Laboratories and King Pharmaceuticals Inc. is off, the parties said Sunday. They cited an inability to agree on new terms after King's recent announcement that it would have to restate earnings as far back as 2002. Mylan, based in Pittsburgh, and King, of Bristol, Tenn., agreed to the deal last July, saying at the time that it would be worth $4 billion.