updated 8/30/2005 9:49:57 AM ET 2005-08-30T13:49:57

Federated Department Stores Inc. on Tuesday said it completed its $11.9 billion acquisition of rival May Department Stores Co., forming a retail company with more than 1,000 stores and $30 billion in annual sales.

"Two great organizations have come together, and we see tremendous opportunity ahead," said Terry J. Lundgren, Federated's chairman, president and chief executive.

Federated said it will operate all of May's stores under their existing names at least through the end of the year. Next fall, Federated plans to convert most May locations to its Macy's nameplate. Federated also owns the Bloomingdale's, Filene's and Famous-Barr chains.

The company also said it plans to divest an additional eight duplicate stores in California, Massachusetts and New York in 2006, and reiterated a promise that there will be no layoffs or job cuts before March 1. It had previously said it planned to divest 68 stores.

May shareholders received $17.75 in cash and 0.3115 share of Federated stock for each outstanding May share, bringing the deal's total value to about $11.87 billion based on Monday's closing prices.

Federated also owns Foley's, Hecht's, Kaufmann's, Lord & Taylor, L.S. Ayres, Marshall Field's, Meier & Frank, Robinsons-May, Strawbridge's, The Jones Store, David's Bridal, After Hours Formalwear and Priscilla of Boston.

As previously announced, a cash dividend of 25 cents per share will be paid on Oct. 3 to Federated shareholders of record on Aug. 29. A 24.5 cent per share dividend will be distributed on Sept. 15 to May shareholders on record as of Aug. 29.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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