Westfield snapped up by French giant for £18.5bn
THE owner of Westfield shopping centres is to be bought by French property giant Unibail-Rodamco in an £18.5billion deal that will create the world’s biggest mall operator.
After the takeover of the Australian company, Westfield’s 35 shopping centres in the UK and America, including London’s White City and Stratford malls, will combine with Unibail’s 69 sites to form a £54billion retail giant attracting 1.2 billion visits annually.
It follows last week’s proposed tie-up of Hammerson, owner of Birmingham’s Bullring, with Lakeside and Trafford Centre operator Intu, as the surge in online buying forces shopping centre groups to focus on their best assets.
Unibail said it had identified cost savings of £88million, including £53million from slashing corporate overheads. Advertising spending will be reduced as the Westfield brand is rolled out across Europe.
Unibail CEO Christophe Cuvillier, pictured, said: “It adds new attractive retail markets in London and the wealthiest catchment areas in the US and represents a compelling opportunity for both companies to realise benefits not available on a standalone basis.”
The French company insisted that shopping centres still have a future as destinations for shoppers to enjoy “experiences” including leisure activities, even if they do their research on line.
John Colley, of Warwick Business School, said: “The industry is under pressure from internet selling and particularly Amazon. As sales fall so do retail property prices, to the point where they become attractive as a discount to asset value. The industry is combating Amazon by reducing costs through mergers.”
Angus Grierson, managing director of LGB Corporate Finance, predicted more property mega-deals
He added: “Shopping-mall owners are facing huge challenges to boost footfall and sales.
“Acquiring Westfield provides UnibailRodamco with a unique platform of superior-quality shopping destinations from which it can accelerate its strategy of concentration, differentiation and innovation.”