European Retail REIT Unibail-Rodamco to Acquire Westfield for $16 Billion

Unibail-Rodamco (PAR: UL:PA) said Dec. 12 it reached an agreement with Westfield Corp. (ASX: WFD) to acquire the Australian mall operator in a deal valued at approximately $16 billion.

The companies say the deal will create a global retail real estate company with $72 billion of gross market value, positioned in 27 retail markets and cities worldwide. The Westfield brand name will gradually be deployed across Unibail-Rodamco’s flagship assets.

Once the deal is finalized, Unibail-Rodamco’s portfolio will consist of 104 assets attracting 1.2 billion visits annually, creating a “must-have partner for all global retailers and brands across Europe and select markets in the United States,” the companies said in a release announcing the deal.

According to the terms of the deal, Unibail-Rodamco will pay Westfield shareholders $7.55 per share, representing a mix of $2.67 in cash in combination with Unibail-Rodamco shares. This represents a 17.8 percent premium on Westfield’s Dec. 11 closing share price of $6.41. The transaction implies an enterprise value for Westfield of $24.7 billion.

Unibail-Rodamco CEO Christophe Cuvillier will maintain that role within the merged company. He said the acquisition of Westfield is “a natural extension of Unibail-Rodamco’s strategy of concentration, differentiation and innovation.” He noted that the deal adds several new retail markets in London and the U.S. to the Unibail-Rodamco portfolio.

“Unibail-Rodamco’s track record makes it the natural home for the legacy of Westfield’s brand and business,” said Frank Lowy, chairman of Westfield. The Lowy family intends to maintain a substantial investment in the company following the completion of the deal, Westfield said.

The new company will have its headquarters in Paris and Schiphol, the Netherlands, with two regional headquarters in Los Angeles and London.

Prior to completion of the deal, a 90 percent interest in OneMarket, Westfield’s retail technology platform, will be spun-off from Westfield into a newly formed ASX-listed entity. Unibail-Rodamco will retain the remaining 10 percent interest in OneMarket.

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