US discounter Target has sold its department store chain Marshall Field's to May Department Stores for US$3.24 billion (£1.78 billion).
Aside from the 62 stores, the cash deal includes nine of Target's 266 Meryvn's department stores, three distribution centres and about US$600 million (£329.5 million) owed on Marshall Field's credit cards.
Analysts were taken aback at the price paid, which was higher than the US$2.2 billion (£1.2 billion) anticipated.
Broker Merrill Lynch noted: 'We were surprised by the purchase price. However, given May's larger exposure to the area versus its direct competitor Federated ... it makes sense that May was willing to pay a higher premium.'
The acquisition gives 438-outlet May greater exposure in the Mid West.
Sales growth at Marshall Field's has been slow in recent years because of the sector's sluggishness. May chief executive Gene Kahn said he expected the acquisition to boost group volume by about 20 per cent. The deal is expected to be completed by September.