European malls giant Unibail-Rodamco in £19bn Westfield deal

Westfield, the Australian owner of London’s two largest shopping centres, on Tuesday agreed to a $24.7 billion (£18.5 billion) takeover by European property behemoth Unibail-Rodamco.

The swoop will see Westfield’s White City and Stratford malls become part of a newly created €61.1 billion (£53.8 billion) retail titan with 104 centres drawing in some 1.2 billion shoppers a year.

The latest consolidation move comes after shopping centres owner Hammerson agreed an all-share takeover of Lakeside owner Intu in a £3.4 billion deal while Canada’s Brookfield splashed out $15 billion on US shopping malls owner GGP last month.

The acquisitions come as landlords and their tenants are grappling with higher business rates and competition from online rivals, while customers are being squeezed by higher inflation.

Unibail and Westfield are aiming for €100 million in annual savings through the deal.

Paris-headquartered Unibail, which has 69 shopping centres, will get 35 Westfield centres as part of the deal. Westfield shareholders will receive a combination of cash and shares, valuing the Sydney firm at A$10.01 a share, an 18% premium.

Westfield has property interests in the capital totalling more than 5.8 million square feet, the equivalent to five Shard skyscrapers, according to agent Colliers International.

Its current projects include a new site in Croydon and a £600 million extension at White City.

Christophe Cuvillier, chief executive of Unibail-Rodamco and boss of the new group, intends to roll out the Westfield name across its flagship shopping centres in places such as Barcelona.

Sir Frank Lowy, who co-founded Westfield in the 1950s, will retire as chairman.

He said: “We look forward to seeing Westfield continue to grow as part of the world’s premier owner of flagship shopping destinations.”

Deutsche Bank and Goldman Sachs are acting as financial advisers to Unibail-Rodamco, and Westfield’s advisers include Rothschild & Co, Jefferies and UBS.

A note from Morgan Stanley said: “The business combination does not alter the structural headwinds impacting retail property landlords. But the asset quality of the combined group should create even more distance between this group and peers on asset quality, and on medium- to long-term rental growth potential.”