Toronto — Hudson’s Bay Company (HBC) has entered into a definitive agreement with METRO AG to acquire Galeria Holding, the parent company of Germany’s Number 1 department store, Kaufhof, for €2.420 billion (C$3.357 billion). The acquisition is expected to close by the end of third fiscal quarter 2015.
HBC has concurrently entered into an agreement in principle with Simon Property Group (Simon) in which the Simon-HBC joint venture intends to purchase at least 40 of Kaufhof’s owned or partially-owned properties for at least €2.4 billion (C$3.3 billion).
With the Kaufhof transactions, HBC is building a premier international retailer with 464 locations in four countries and eight leading banners.
“These are exciting transactions that demonstrate our proven growth formula in action: improving solid retail operations, unlocking the value of real estate and growing through acquisitions. This is the right investment at the right time,” says Richard Baker, governor and executive chairman of HBC. “We have been carefully surveying the European retail landscape for many years for a potential expansion opportunity and have watched Kaufhof build on its exceptional real estate to become the Number 1 department store in Germany. We are excited to work with the existing Kaufhof management team, bring our expertise to bear in the German retail sector and welcome Kaufhof to our portfolio of dynamic brands.”
Kaufhof has 103 Galeria Kaufhof locations and 16 Sportarena stores. Kaufhof also operates Belgium’s only department store with 16 Galeria INNO locations across the country. Kaufhof’s management is expected to remain in place following the closing of the acquisition providing separate management teams for each business in North America and Europe, with each fully focused on their respective businesses.
When Kaufhof is combined with HBC’s current portfolio of iconic store banners, including Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Saks OFF 5TH and Home Outfitters, HBC will operate 464 stores with approximately 44% of sales generated in United States, 31% in Germany, 23% in Canada and 2% in Belgium.
Hudson’s Bay Company, founded in 1670, offers a range of retailing categories and shopping experiences primarily in the United States and Canada. Banners include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue and Saks Fifth Avenue OFF 5TH.
SOURCE: Hudson’s Bay Company