American retail property giants Simon Property Group and Taubman Centers have announced an effective merger, including the three-mall strong Taubman Asia portfolio.
Simon is to buy an 80-per-cent interest in Taubman, with the Taubman family retaining a 20 per cent stake in a US$3.6 billion deal. Taubman owns, manages and/or leases 23 super-regional shopping centres in the US and three in Asia via its Hong Kong-headquartered Taubman Asia business.
The US properties include The Mall at Short Hills in New Jersey, and the Beverly Center in Los Angeles.
The group’s Asian properties are the Starfield Hanam in South Korea (pictured above), and the Chinese properties CityOn Xi’an and CityOn Zhengzhou. Combined, the 26 malls account for 25 million sqft of gross leasable area.
After the merger, the properties will continue to run by current Taubman chairman, president and CEO Robert S Taubman, in partnership with Simon.
“The parties have agreed to work together to implement best practices to achieve operational efficiencies and will eliminate Taubman’s public company costs immediately following closing,” the companies said in a statement.
Simon Group, the US’ largest retail property developer, owns or has an interest in more than 325 properties comprising some 241 million sqft. Its flagship properties include The Forum Shops at Caesar’s Palace in Las Vegas, Woodbury Common in New Jersey, the King of Prussia Mall in Pennsylvania and Copley Place in Boston. It has malls in 37 US states and Puerto Rico. It also has a premium outlet mall under construction in Bangkok, Thailand, and several outlet malls in Japan.
Simon’s David Simon said the joining together of the two companies will enhance the ability of Taubman to invest in “innovative retail environments that create exciting shopping and entertainment experiences for consumers, immersive opportunities for retailers, and substantial new job prospects for local communities”.
Simon’s transaction price of $52.50 a share for Taubman represents a 51 per cent premium to the company’s closing price last Friday.
The deal is subject to final shareholder approval.
