Westfield bought by Unibail Rodamco in £18.5bn deal

Westfield bought by Unibail Rodamco in £18.5bn deal

Westfield bought by Unibail Rodamco in £18.5bn deal

Unibail CEO Christophe Cuvillier said: "It adds new attractive retail markets in London and the wealthiest catchment areas in the United States and represents a compelling opportunity for both companies to realise benefits not available on a standalone basis". The company also is developing malls in Brussels and Hamburg, Germany, according to The Times.

Unibail-Rodamco owns and operates 69 shopping centers in Europe including in Paris, Madrid, Stockholm, Amsterdam and Munich.

The deal combines two of the biggest mall operators in the world at a time when malls are going through many well-publicized struggles, according to the Wall Street Journal.

An emotional Lowy said he and his sons will continue to serve in advisory roles to the new company, while his family will maintain a "substantial investment in the group".

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

"Westfield was built by Frank Lowy, the billionaire shopping center tycoon who started with one shopping center outside of Sydney in 1959".

Shares in Unibail-Rodamco, which was formed in 2007 by the merger of France's Unibail and Dutch-based Rodamco, were down 4.0 percent at 1500 GMT, with analysts at Kepler Cheuvreux saying that the deal looked expensive.

Westfield embarked on a restructure in 2014, spinning off its Australia and New Zealand business from its worldwide operations into a separate entity. And "if you invested in Westfield 18 months ago, you would have lost money even if you accepted the [Australian] $10-a-share offer now on the table", observes Elizabeth Knight for the Sydney Morning Herald.

Unibail Rodamco is the largest commercial real estate company in Europe and will own 104 properties across the world when the acquisition is complete, reportedly resulting in cost savings of $100 million a year. "Shares of such companies have been hit hard and store closures are accelerating, pressuring landlords to fill empty space and reinvent shopping centers", Pooja Thakur Mahrotri and Matthew Burgess write for Bloomberg.

Sir Frank Lowy AC, chairman of the Westfield board of directors, said the deal with Unibail-Rodamco is the culmination of the strategic journey Westfield has been on since its 2014 restructuring. The company on Tuesday said this had set it up for the Unibail deal. Westfield's portfolio is valued at $32 billion.

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