Published: Wed, December 13, 2017
Markets | By Josh Butler

Mall Operator Westfield Sold to French Real Estate Giant

Mall Operator Westfield Sold to French Real Estate Giant

Westfield Corp., operator of upscale shopping malls in Los Angeles and dozens of other locations in the USA and Britain, is being sold to French commercial real estate giant Unibail-Rodamco in a $16-billion deal, the two companies announced Tuesday.

After the takeover of the Australian company, Westfi eld's 35 shopping centres in the United Kingdom and America, including London's White City and Stratford malls, will combine with Unibail's 69 sites to form a £54billion retail giant attracting 1.2 billion visits annually. Other Southern California locations include the Valencia Town Center mall in Santa Clarita, Westfield Mission Valley, and Horton Plaza and UTC malls in San Diego.

Chairman Sir Frank Lowy, who was knighted just this week by Queen Elizabeth II says the move was part of its journey, and had been on the cards since its 2014 restructure.

A tough consumer spending environment and intense competition from online rivals has made retailers more selective with their expansion plans, making life tough for shopping center operators and driving consolidation in the sector.

Around 37 percent of the combined entity's portfolio would be in France and 22 percent in the United States.

The cash-and-stock deal values shares of Australia-based Westfield at $7.55 a share, an 18 percent premium over Monday's closing price, the Los Angeles Times reported.

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"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.

Unibail-Rodamco, based in Paris, is the result of a 2007 merger of two French property investment firms. The mall, anchored by Macy's, Sears, and JC Penney, has more than 200 stores.

The takeover offer values each Westfield security at $10.01, and has been recommended to shareholders by chairman and major shareholder Frank Lowy.

Westfield separated its operation in Australia and New Zealand from that in the US and Europe in 2014.

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