Westfield, the Australia-based mall operator with a sizable U.S. presence, is being bought for $15.7 billion from Unibail-Rodamco SE, the European shopping center firm.
The Wall Street Journal reports that the bid represents the latest news of consolidation within the mall arena, where eCommerce is hurting brick and mortar retailer tenants. Foot traffic has, of course, been hurt as more consumers shop online — leading to stores being shuttered.
The cross border deal making comes, said the Journal, as eCommerce has been relatively slower to take off across the pond. Consider the fact for 2016, that online shopping represented almost 14 percent of online transactions in the U.S. but only eight percent in Europe, as measured by the Center for Retail Research.
Unibail has a 95 percent occupancy rate at its Europe-based malls, with an eye on the Westfield deal expanding what the Journal termed “flagship” centers (encompassing 17 of the 35 malls in the company’s pantheon) and said it will rebrand under the Westfield name, the Journal noted.
Westfield, said the Journal, is among the higher-end mall owners who have seen share prices hit by the onslaught of eCommerce players, and the news of the deal came on Tuesday (Dec. 12th). Among the fellow high-end operators who have seen bidding activity this year: GGP caught a bid by Brookfield Property, which ponied up $14.8 billion (the latter had already owned a third of the former).
As for the mechanics of the deal, the Lowy family, which owns 10 percent of Westfield’s shares — and where the deal represents an 18 percent premium — would own 2.5 percent post-transaction. Frank Lowy, who founded the firm in Australia, will retire his role as chairman and his two sons will step aside as co-CEOs.