Shopping-Mall Operator Westfield Valued at $15.7 Billion in Takeover Offer

Tammy Harvey
December 13, 2017

Unibail-Rodamco SE, Europe's largest commercial landlord, has agreed to buy Australia's Westfield Corp for A$20.8 billion (US$15.7 billion) amid a consolidation of mall operators worldwide. 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.

Westfield started in 1959 with one shopping center in a suburb of Sydney, Australia, and was first listed on the Australian Stock Exchange the following year, according to its website.

Talks to seal a deal had taken just six weeks, said Lowy whose family will no longer run the company he set up in 1960 but will end up with a 2.8 percent stake in the combined group.

As sales fall so do retail property prices, to the point where they become attractive as a discount to asset value.

"The acquisition of Westfield is a natural extension of Unibail-Rodamco's strategy of concentration, differentiation and innovation", Unibail CEO Christophe Cuvillier said in a news release.

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. Trading in Westfield shares was halted before the market opened on Tuesday, pending news of the deal.

Not yet. Unibail-Rodamco's value fell as much as 4.1% on news of the deal. It now includes premier shopping malls in California, Connecticut, New York, New Jersey and London, as well as shopping areas at Newark Liberty International Airport in New Jersey and Kennedy International Airport in New York. It gets nearly 70 percent of its US$1.8 billion annual revenue in the U.S., where companies are trying to repurpose struggling brick-and-mortar shopping centers.

Unibail said it had identified cost savings of £88million, including £53million from slashing corporate overheads. The deal, according to a Reuters report, is valued at $16 billion.

Deutsche Bank (DBKGn.DE) and Goldman Sachs (GS.N) have committed to provide 6.1 billion euros in funding to cover the cash portion of the offer, Unibail said.

Other reports by Ligue1talk

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