Mall the rage

12 December 2017 By Alec Macfarlane

The mall empire led by Australian magnate Frank Lowy is selling itself to European property group Unibail-Rodamco. The combined structure is tangled and merger savings are scant. Given consumer shopping trends, the benefits of getting bigger may have a limited effect.

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France's Unibail-Rodamco has agreed to acquire Australian mall owner Westfield Corp for $24.7 billion including debt. The transaction has already been unanimously recommended by Westfield's board and Unibail-Rodamco's supervisory board.

Under the terms of the agreement, Westfield shareholders will receive a combination of cash and shares in Unibail-Rodamco valuing each Westfield security at a price of $7.55. The joint statement says the offer represents a 17.8 percent premium to Westfield's closing price on Dec. 11.

The statement adds that the deal will result in a "global property leader" with 61.1 billion euros ($72.2 billion) of gross market value, focused on retail developments in "flagship shopping destinations."

Deutsche Bank and Goldman Sachs have provided 6.1 billion euros in financing to cover the cash portion of the offer. Unibail-Rodamco has earmarked around 3 billion euros in assets to be disposed of over the next few years, per the announcement.

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