Paris-based commercial landlord Unibail-Rodamco is acquiring Sydney, Australia-based Westfield Corp., which counts the World Trade Center mall in lower Manhattan among its USA properties, in a cash-and-stock deal valued at $15.7 billion.
Unibail will acquire Westfield for $7.55 per share, a 18 percent premium over Westfield's closing price on Monday.
The announcement comes just a week after Westfield's largest United Kingdom shopping centre rival Intu announced a £3.4 billion deal with property giant Hammerson, set to create the UK's largest property company worth £21 billion.
Cuvillier commented: "The acquisition of Westfield is a natural extension of Unibail-Rodamco's strategy of concentration, differentiation and innovation". The company also owns Westfield Culver City (which recently completed a $1 billion makeover), Westfield Topanga, Westfield Fashion Square in Sherman Oaks and Westfield Valencia Town Center in Santa Clarita.
Founded by billionaire Frank Lowy, Westfield began in 1959 with one shopping mall in the outer suburbs of Sydney and has grown to become one of the world's largest shopping center owners and managers.
The deal is part of a wave of takeovers and acquisitions in the retail property industry as sales decline.
"With a A$10 handle in front, the offer doesn't look bad", Sydney-based CLSA analyst Sholto Maconochie said, adding the deal would "create the leading mall operator globally". Unibail expects the deal to close in the first half of 2018.
Tuesday's announcement comes as mall operators embark on a consolidation drive as they face increasingly tough competition from online shopping sites such as Amazon, which this month launched in Australia. "If you are a retailer, and you still want to have some physical stores, you want them in the best malls you can get-the malls with entertainment, food and beverage", Andrea Felsted, a retail columnist, told Bloomberg.
Unibail was helped by very cheap European debt in the 2.0-2.5 percent range and synergies that will result in about $100 million in cost savings, said Scott Crowe, chief investment strategist at real estate focused CenterSquare Investment Management in Philadelphia.
The transaction would create a global operator and developer of flagship shopping centers spanning the USA and Europe, with a gross market value of US$72.2 billion.