Shareholders of department store companies Federated (NYSE:FD) and May (NYSE:MAY) approved the merger of the two firms on Wednesday. This brings the deal one step closer to the anticipated third-quarter completion, although the Federal Trade Commission must still approve the merger.

The market already appears to have given its stamp of approval to the deal, as shares of Federated have risen from the high $50s to the mid-$70s since the announcement in February.

I also believe there's a lot to commend this deal. It doubles the size of Federated from $15 billion in annual sales to around $30 billion. The combined company is likely to realize significant synergies in advertising and overhead expense -- upward of $500 million annually, according to analyst estimates. The merger will also give a boost to the Macy's brand, as underperforming stores like Filene's and Strawbridge's are converted to Macy's. It also gives Federated an opportunity to apply its sharp merchandising focus to the generally lackluster comparable-store sales the May brands have delivered in recent years. On Wednesday, Chairman and Chief Executive of Federated Terry J. Lundgren reportedly said, "I want to get into these stores as quickly as I possibly can."

Of course, the big prize is the increased buying clout of what will now be the largest department store company in the United States. This should give Federated a leg up in competing against retail giants like Wal-Mart (NYSE:WMT), Target (NYSE:TGT), and smaller department store operators like JCPenney (NYSE:JCP) and Kohl's (NYSE:KSS). But it won't be an easy task. Integrating buying organizations and maintaining distinct brand identities across multiple retail nameplates is no walk in the park. Only time will tell whether bigger means better, but at this point, I'm willing to give Federated the benefit of the doubt.

One aspect of this deal that intrigues me but hasn't received much play in the media is the fate of May's bridal division. This group is made up of David's Bridal, which covers the bridal side of the wedding attire, and After Hours Formalwear, which takes care of the groom with tuxedo rental. Both entities are the dominant national players in their respective segments. There is the potential for some sweet synergies between a department store operation and a strong bridal group. May was never quite able to get these synergies humming, but perhaps Federated can make it work.

For the long run, I see this department store powerhouse as an interesting play that's worth keeping an eye on, especially for anyone getting a nosebleed from the high valuations of soaring apparel retailers like Chico's and Abercrombie & Fitch.

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Fool contributor Timothy M. Otte looks for retail value from Atlanta. He owns stock in Wal-Mart. He welcomes comments on his articles. The Fool has a strict disclosure policy.