TORONTO — Sears Canada Inc. snapped up the most famous name in Canadian retailing, for $20 million in cash Monday, saying it might keep the T. Eaton Co. banner alive via the Internet and catalog business, but probably not in a store format.
Toronto-based Sears Canada, which is 55% owned by Sears, Roebuck & Co. of Hoffman Estates, Ill., said it would assume ownership of the Eaton name, trademark, Web site and eight stores across the country, including three in Toronto.
Under the deal, Sears Canada would buy all outstanding shares of Eaton, which sought protection from its creditors last month under the Bankruptcy and Insolvency Act. Sears, currently Canada's most successful retailer, also would pay $13.5 million upon realization of tax losses estimated at about $263.5 million.
Sears has an option to buy five more Eaton stores under the deal. The eight stores being acquired would be converted to Sears outlets.
The transaction is subject to approval by shareholders, creditors and Bankruptcy Court, and is expected to close by Dec. 31. Analysts said the deal is not likely to face much opposition.
Eaton still has 46 stores in its collapsed chain.
Sears Roebuck shares fell 31 cents to close at $33.44 on the New York Stock Exchange.