May
The May Department Stores Company
Acquisition of Marshall Field's
June 2004
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Safe Harbor Statement/Acquisition Disclosure
This announcement may contain, in addition to historical information, certain
forward-looking statements that involve risks and uncertainties. Actual
results could differ materially from those currently anticipated as a result
of a number of factors, including risks and uncertainties discussed in The
May Department Stores Company's filings with the Securities and Exchange
Commission. Those factors include, among other things, the competitive
environment in the retailing industry in general and in the specific market
areas in which May and its divisions operate, including consumer confidence,
changes in discretionary consumer spending, changes in costs of goods and
services and economic conditions in general, unseasonable weather and those
risks generally associated with the integration of Marshall Field's with May.
There can be no assurance that the acquisition will close, as to the timing
of the closing, that the integration will be successful or without
unanticipated costs or that anticipated synergies or other benefits will be
realized. The May Department Stores Company assumes no obligation to update
any forward-looking statements as a result of new information or future
events or developments.
May
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Transaction Overview
May
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Transaction Overview
- - Structure:
- Cash Purchase of Marshall Field's assets and nine
Mervyn's Twin Cities locations for $3.240 billion
- 2/3 long-term borrowing, 1/3 cash and short
term borrowing
- - Approvals:
- Regulatory approvals customary to a transaction of
this type
- No shareholder approval required
- - Closing:
- Expected at the end of May's second fiscal quarter or
during the third fiscal quarter
May
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Strategic Rationale
May
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Strategic Rationale for the Acquisition
- - Gives May leading positions with a nationally recognized
name plate in three large Midwestern metro markets:
Chicago, Detroit, and Minneapolis
- - 2003 annual revenues of $2.6 billion and segment earnings
of $107 million
- - Estimated $85 million in synergies in FY 2005 and
$140 million in FY 2006
May
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Strategic Rationale for the Acquisition
- - Opportunity to leverage:
- May's economies of scale
- May's department store operating efficiencies
- Field's upscale merchandise assortments
- Leverage May's breadth of proprietary
product to supplement Field's current
proprietary programs
- Field's dedicated consumer base, especially
its focus on "zoomers," teamed with May's
strategic offense and focus on attracting
younger customers
May
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May and Marshall Field's
Department Stores
May - 438
Marshall Field's 62
[Map]
May
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Integration Strategy
- - Field's to be operated as a separate division within May
- - Field's leadership team to work with May team to ensure
seamless integration
- - Capitalize on May's prior successful acquisition
and integration experiences, e.g., Foley's, Filene's,
Bridal Group
- - Introduce May's operational department store
efficiencies to Marshall Field's, e.g., IT integration
May
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Marshall Field's
Pro Forma Estimates
2005 2006
Revenues* $2,600 $2,700
Stores 62 62
EBIT $200 $265
*Revenues do not include finance charge revenue.
May
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May
The May Department Stores Company
Lord & Taylor Famous Barr Filene's
Foley's Hecht's Kaufmann's
L.S. Ayres Marshall Field's Meier & Frank
Robinsons May Strawbridge's The Jones Store
David's Bridal After Hours Formalwear Priscilla of Boston
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