$15.7 Billion Deal Creates Largest Global Mall Operator

$15.7 Billion Deal Creates Largest Global Mall Operator

$15.7 Billion Deal Creates Largest Global Mall Operator

Westfield Corporation, the Australian mall operator with significant presence in the USA and the United Kingdom, has sold to European real estate giant Unibail-Rodamco SE for $25 billion, the two companies announced Tuesday.

Under the terms of the deal, Westfield shareholders would receive cash and shares totaling $7.55, or A$10.01, an 18 percent premium per share.

The sale of Westfield follows retail real estate investment trust GGP Inc.'s rejection of a $14.8 billion offer from Brookfield Property for the two-thirds it did not already own.

The deal enables Unibail-Rodamco - which is Europe's largest publicly traded commercial real estate company - to expand its presence into "a number of new attractive real estate markets", including London and wealthy areas in the U.S., Cuvillier said in a statement. 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.

John Colley of Warwick Business School told International Business Times Australia that consolidation in the retail property industry is accelerating. Westfield, which started off in Sydney in the 1950s, is known for its 35 upscale shopping centers in major metropolitan areas, particularly in the USA and Britain.

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Unibail is focused on large sites with heavy pedestrian traffic and high-profile tenants such as Apple, Zara and Primark and analysts said it would gain from importing the Westfield model.

Not yet. Unibail-Rodamco's value fell as much as 4.1% on news of the deal.

Shopping center owners are scrambling to reinvent themselves to keep up with rapid changes in consumer behavior, with the expansion of e-commerce giant Amazon.com coinciding with an explosion in online purchases, while consumers increasingly treat malls as places for socializing and window shopping. The mall, anchored by Macy's, Sears, and JC Penney, has more than 200 stores. It gets nearly 70 percent of its US$1.8 billion annual revenue in the United States, where companies are trying to repurpose struggling brick-and-mortar shopping centers.

Westfield said it owns 35 shopping malls valued at $32 billion.

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