Mall Operator Westfield Sold to French Real Estate Giant

Lucy Hill
December 13, 2017

Mall operators have been involved in a wave of mergers and acquisitions globally as the rise of e-commerce has squeezed traditional retailers.

Under the terms of the deal, Westfield shareholders would receive cash and shares totaling $7.55, or A$10.01, an 18 percent premium per share.

Unibail is the largest commercial real estate company in Europe.

Once dominant United States department store operators such as Macy's Inc (M.N) and J C Penney Co Inc (JCP.N) have announced plans to shut hundreds of stores in recent years, putting pressure on landlords to find new "anchor tenants" or come up with new ways to grow returns.

Unibail's move dwarfs British shopping center owner Hammerson's (HMSO.L) purchase of smaller rival Intu Properties (INTUP.L) for some 3.4 billion pounds, creating a global leader with $72 billion of gross market value in 27 retail markets under the distinctive red Westfield logo. The deal, according to a Reuters report, is valued at $16 billion. Westfield, which started off in Sydney in the 1950s, is known for its 35 upscale shopping centers in major metropolitan areas, particularly in the USA and Britain.

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For Westfield Chairman Frank Lowy, the deal represents the culmination of a decadeslong career in shopping malls that began when he opened a deli in a western Sydney suburb.

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

Lowy, a Holocaust survivor from Czechoslovakia, served as Westfield's chief executive for more than 50 years before becoming non-executive chairman of the board in 2011. "On Tuesday he told reporters the sale to Unibail-Rodamco was a natural outcome from that demerger", they write.

Westfield's portfolio includes shopping areas at U.S. airports such as Newark Liberty International, John F. Kennedy International, Los Angeles International and Orlando International.

"Lowy has given time and money to many other causes, including the Lowy Institute for International Policy, a think tank that focuses on Australia's place in the world, and he has donated millions to medical research in Australia". Nice closures to a triumphant story.

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