Unibail-Rodamco to acquire Westfield for US$24.7 billion

Europe-based property management company Unibail-Rodamco has entered into an agreement to acquire USA mall operator Westfield.

Shareholders will receive $10.01 in cash and shares, per share.

The transaction would create a global operator and developer of flagship shopping centers spanning the USA and Europe, with a gross market value of US$72.2 billion. "For this deal no doubt the new Head Office will be in Paris so the Westfield Australian office is likely to have a limited future", he said.

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.

He added the company's acquisition of Westfield is a natural extension of its strategy of concentration, innovation and differentiation. The move for Westfield gives Unibail access to the London market. The company was built by Frank Lowy, an Australian billionaire who started with one shopping center outside of Sydney in 1959.

"This is really the polarization of shopping mall markets".

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.

"Westfield has been seen as a pioneer in US mall redevelopment, melding traditional mall retailers with atypical mall fixtures like upscale food courts, high-end restaurants, bars, cinemas and boutique fashion outlets", write Reuters's Byron Kaye and Sonali Paul.

American and European assets retained the Westfield brand, while assets in Australia and New Zealand were formed into a new entity called Scentre Group.

Westfield's Frank Lowy added: "The transaction announced today is the culmination of the strategic journey Westfield has been on since its 2014 restructure". Westfield's earning have stayed in line with analyst expectations since the split.

The deal is subject to approval by both companies' shareholders and is expected to close in the first half of next year.

Not yet. Unibail-Rodamco's value fell as much as 4.1% on news of the deal.