Commercial Property

Westfield sells to France’s Unibail to create €61bn shopping mall group

Australian billionaire who founded shopping giant in 1960 calls time on stewardship

Westfield chairman Sir Frank Lowy and his son Peter talk via video-link as his other son Steven listens on during a media conference in Sydney on Tuesday. Photograph: David Gray/Reuters

Jamie Smyth Sydney
Tue Dec 12 2017 - 19:01

Westfield, the developer behind shopping centres in London and New York, has agreed to be acquired by France's Unibail-Rodamco in a $24.7 billion deal that will create the world's second-biggest mall owner by market value.

Sir Frank Lowy, the Australian billionaire who founded the business in a Sydney suburb in 1960 and turned it into a global shopping centre power, called time on his stewardship of the business at a time when retail groups are facing intense competition from online rivals such as Amazon.

The deal allows Unibail-Rodamco, Europe's largest property company, to extend its footprint into the US and UK where Westfield has developed assets in prime locations, such as New York's World Trade Center, London's Shepherd's Bush and Century City in Los Angeles.

Christophe Cuvillier, Unibail-Rodamco chief executive, said the deal would create a new group under the Westfield brand with 56 shopping destinations in 13 different countries and 27 capital cities.

READ MORE

Flagship

“The flagship portfolio of Westfield is absolutely unique. It is established in the wealthiest cities of the US with very strong demographic fundamentals,” he said in a call with analysts.

Sir Frank (87) said: "We started small but we took Westfield to the world." He added it was the right time to sell given Unibail-Rodamco was offering a good price to shareholders and given the pressures in the global retail industry.

Unibail-Rodamco said it would pay Westfield shareholders the equivalent of $7.55 per security in a mix of cash and shares – an 18 per cent premium to Monday’s closing price. The combination of the retail property groups would create a global leader in the sector, with 104 properties worth €61.1 billion.

The deal comes as traditional shopping malls are trying to reinvent themselves and increase their relevance in the face of changing consumer behaviour and heightened competition from online retailers such as Amazon.

The US – where Westfield owns a number of malls – has been particularly badly hit.

A slump in the share prices of listed property companies has prompted some investors to buy retail real estate with a view to converting it to other uses. – Copyright The Financial Times Limited 2017

LATEST STORIES