Sears Spins Off Allstate in $21 Billion Dividend

Strategic Insights -

Sears, Roebuck and Co. has spun off its 80.3 percent interest in The Allstate Corporation through a special tax-free dividend, marking a significant shift in the companies' long-standing partnership. As Sears shareholders receive approximately 0.93 shares of Allstate for every share of Sears common they own, the two companies embark on new eras as independent entities. With combined revenues of over $54 billion at year-end, Allstate and Sears are poised to maintain their positions in the market, serving customers, offering opportunities to employees, and providing returns to shareholders.

Key Takeaways:

  • Sears spun off its 80.3% interest in Allstate through a special tax-free dividend, providing shareholders with approximately 0.93 shares of Allstate for every share of Sears common owned.
  • The transaction involves a significant transfer of assets, with Sears shareholders receiving certificates for their shares of Allstate, and any fractional shares paid in cash.
  • Edward A. Brennan, Sears' chairman and chief executive officer, acknowledged the end of an era, highlighting the potential for both companies to be even more successful as independent entities.
  • Allstate joins Sears as a member of the S&P Index effective on July 12, following the close of business.
  • At year-end 1994, Allstate reported $21 billion in revenues, while Sears reported $33 billion, ranking each company in the top six percent of the S&P 500 companies.

Statistics:

  • Sears shareholders received approximately 0.93 shares of Allstate for every share of Sears common they owned.
  • The dividend involved a transfer of Sears' 80.3% interest in Allstate.
  • Allstate had $21 billion in revenues at year-end 1994.
  • Sears reported $33 billion in revenues at year-end 1994, ranking it in the top 6% of the S&P 500 companies.

Sources:

  • PRNewswire, June 30, 1995
  • Allstate Corporation (NYSE: ALL)
  • Sears, Roebuck and Co. (NYSE: S)