Europe’s largest property company is to take over Westfield, the Australian shopping centre giant founded by two Holocaust survivors, in a $24.7bn deal that will create one of the world’s largest mall operators.
Unibail-Rodamco of France has agreed a recommended takeover with Westfield, best known in the UK for its developments at Shepherds Bush and Stratford in London.
The combined group will own 104 shopping centres, worth nearly €62bn, and including some considered to be the best malls in the world, in 27 capital cities. It will also have a €12.3bn pipeline of development sites that include proposals to build centres in Croydon and Milan.
The transaction is the latest takeover move in a global shopping centre market facing enormous structural challenges at a time when more consumers are shopping online and retailers need fewer physical stores.
Last week Hammerson, which is behind the Bullring centre in Birmingham, announced a plan to take over its UK rival Intu Properties in a £3.4bn all-share deal that it said was driven by the need to be “bigger and better”.
The Guardian reports that Unibail-Rodamco, which owns Forum des Halles in Paris, plans to roll out Westfield centres in Europe and the US. The Lowy family, Westfield’s biggest shareholder, is selling its 9.5% stake for a mixture of cash and Unibail shares.
The planned tie-up comes as the growing number of people buying items online, fuelled by Amazon, forces shopping centre operators to focus on their best assets.
According to the Telegraph, Sir Frank and his family will own a 2.8pc stake in Unibail-Rodamco if the deal goes ahead. He said on Tuesday that the family wanted to change its role, adding “we would rather be investors than executives”.
He said the deal was “the culmination of the strategic journey Westfield has been on since its 2014 restructure”. The two businesses are understood to have been brokering a deal since October.
Sir Frank will step down as chairman of the business, while his sons Peter and Steven will also step down as co-chief executives.
The Independent reported that Christophe Cuvillier, chairman of the management board and chief executive of Unibail-Rodamco said: “The acquisition of Westfield is a natural extension of Unibail-Rodamco’s strategy of concentration, differentiation and innovation.”
The FT adds that the deal allows Unibail-Rodamco, Europe’s largest property company, to extend its footprint into the US and UK where Westfield has developed assets in prime locations, such as New York’s World Trade Center, London’s Shepherd’s Bush, and Century City in Los Angeles. Cuvillier, added that the deal will create a new group under the Westfield brand that will own 56 shopping destinations in 13 different countries and 27 capital cities.
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