Published: Wed, December 13, 2017
Finance | By Gustavo Carr

Westfield Group sold to French property giant Unibail-Rodamco

Westfield Group sold to French property giant Unibail-Rodamco

Westfield Corp., owner of the Westfield Topanga & the Village in Woodland Hills, was acquired by French commercial real estate firm Unibail-Rodamco for $16 billion, the companies announced Tuesday.

Unibail was helped by very cheap European debt in the 2.0-2.5 percent range and synergies that will result in about $100 million in cost savings, said Scott Crowe, chief investment strategist at real estate focused CenterSquare Investment Management in Philadelphia.

The owner of Westfield shopping centers is being bought by French property investor Unibail-Rodamco for $15.7 billion as shop retailers struggle to keep up with the move to online sites like Amazon.

"Westfield is the best fit for us and a natural extension of our strategy", Unibail's chief executive Christopher Cuvillier said following the announcement of the proposed deal, which would be worth $24.7 billion including debt. "It adds a number of new attractive retail markets in London and the wealthiest catchment areas in the United States".

Shareholders in the shopping centre empire will receive AUD$10.01 per share which is about an 18 per cent premium to Westfield's closing price of $8.50 on 11 December.

The deal values the Lowy family's stake in Westfield at just over $A3 billion.

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Christophe Cuvillier will be the group CEO and Colin Dyer will be the group chairman of the supervisory board.

Frank Lowy said the takeover is a culmination of the strategic direction Westfield has taken since a restructure in 2014, when it separated its United Kingdom and USA operations from those in Australia and New Zealand, which are now controlled by Scentre Group.

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

Westfield Group spun off its Australian and New Zealand operations in 2013 and reorganized its Northern Hemisphere properties as Westfield 2014. The restructure had initially drawn criticism from shareholders, but proved to be a wise move for Westfield to focus on mall operation in the US and Europe.

The Unibail transaction is pending regulatory approvals by the Australian court and the shareholders of both companies.

Scentre is not included in the deal with Unibail-Rodamco.

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