Century-old department store Nordstrom has agreed to be acquired and taken private by Nordstrom family members and a Mexican retail group in a $6.25 billion deal to combat competition from discount chains and other industry players.
Nordstrom shareholders will receive $24.25 in cash for each share of Nordstrom common stock, totaling approximately $4 billion, including a 42% premium on the company’s stock as of March 18.
The big picture: The acquiring group will also assume over $2 billion in Nordstrom debt, indicating a significant financial commitment in the acquisition deal.
- The deal is expected to close in the first half of 2025, and afterwards, the company’s shares will no longer be publicly traded, allowing the Nordstrom family and their backers to make strategic, long-term investments away from public market scrutiny.
Driving the news: The proposed transaction has received unanimous approval from Nordstrom’s board of directors, with the Nordstrom family members Erik and Pete Nordstrom recusing themselves from the vote, as they will be taking over the company.
- Erik and Pete Nordstrom, part of the fourth-generation leadership at the Seattle retailer founded in 1901, will have a majority ownership stake in the company post-acquisition, with Erik serving as the chief executive and Peter as the president.
- Nordstrom’s acquisition comes after the company faced challenges such as flatlining sales over the past decade, leading to the closure of all Canadian stores and cutting 2,500 jobs as part of restructuring efforts.
- The Nordstrom family’s earlier attempt to take the company private in 2017, which failed in 2018, has now culminated in a successful agreement following renewed buyout negotiations, indicating a long-standing interest in maintaining family control over the retail chain.
