Dillard’s to Acquire Mercantile Chain

Dillard’s Inc. agreed to buy Mercantile Stores Co., one of the last major independent department store chains, for $2.9 billion in a deal that would create a retailing powerhouse in the Midwest and South. Dillard’s, a chain of 272 department stores based in Little Rock, Ark., said it would pay $80 in cash for each share of Mercantile, which has 103 department stores and 16 home fashion stores. Fairfield, Ohio-based Mercantile is 40% owned by textile magnate Roger Milliken and his family, which has agreed to the transaction. Analysts said the deal, which would combine the nation’s No. 8 and No. 12 general merchandise retail chains, was a good one for both companies. Wall Street agreed, and investors bid Mercantile stock up $5.31 to close at $78.63. Dillard’s shares jumped $2.44 to close at $43. Both trade on the New York Stock Exchange.