Nordstrom is to be acquired by the Nordstrom family and a Mexican retailer for $6.25 billion

SEATTLE- Century-old department store Nordstrom has agreed to be acquired and taken private by members of the Nordstrom family and a Mexican retailer in a $6.25 billion deal as the industry faces pressure from discount chains and other competition.

Public companies are under much more scrutiny, and if they are private, the Nordstroms may have more leeway in reviving a department store chain that, like others, has been trying to revive lackluster sales for years.

Nordstrom shareholders will receive $24.25 in cash for each Nordstrom common share, totaling about $4 billion. This represents a 42% premium to the company’s shares as of March 18, when the media reported a possible deal.

The Nordstroms will also take on more than $2 billion in debt.

Rivals like Macy’s and Kohl’s have been pressured by major investors to make big changes to deliver more profits to shareholders. Traditional department stores face competition from giants like Walmart and Target, as well as a host of fast-fashion bands and Amazon.com.

Sales at Nordstrom have essentially been stagnant over the past decade.

The offer announced Monday exceeds the previous offer of $23 per share made by the Nordstrom family and Mexican retailer El Puerto de Liverpool in September.

The board also plans to authorize a special dividend of up to 25 cents per share, based on Nordstrom’s cash balance immediately prior to and contingent on the closing of the transaction.

The transaction is expected to close in the first half of 2025. At this point, the company’s shares will no longer be publicly traded.

Nordstrom’s board unanimously approved the proposed transaction, with members Erik and Pete Nordstrom, part of the Nordstrom family, taking over the company – and recusing themselves from that vote.

Once the transaction closes, the Nordstrom family will hold a majority stake in the company.

Erik and Pete Nordstrom are the fourth generation to lead the Seattle retailer, which was founded in 1901 as a shoe store. Erik is the company’s managing director and Peter is president.

Shares of Nordstrom fell about 1% at the opening bell, but they have risen 34% this year on rumors of a family takeover.

After opening 23 new stores so far this year, the company now operates a total of 381 Nordstrom and Nordstrom Rack stores across the United States