Westfield shopping malls sold for £18bn
Deal creates £54bn titan to tackle online threat
THE billionaire tycoon behind shopping centre group Westfield has agreed to sell the company for £18.5bn as traditional stores face an onslaught from online rivals.
Sir Frank Lowy, who built Westfield into a global powerhouse, has struck a deal with French rival Unibail-Rodamco more than half a century after he set up the business in Sydney in 1960.
‘What a privilege it has been to lead this great Australian company,’ the tycoon said. ‘We started small but we took Westfield to the world.’
The takeover will create a £54bn retail giant with 102 shopping centres in 13 countries – taking in many of the world’s wealthiest cities such as London, Paris, Stockholm, New York and Los Angeles.
The proposed deal comes just days after Hammerson, which owns the Bullring in Birmingham and Brent Cross in London, agreed to buy rival Intu for £3.4bn as it stepped up its fight against internet giants such as Amazon. Westfield owns 33 shopping centres in the US and two in London, at White City and Stratford, while Unibail operates across Europe. Westfield is also developing a site at Croydon with Hammerson.
Between them, the Westfield and Unibail shopping centres attract more than 1.2bn visitors a year.
But shopping centres and High Streets are under siege from the likes of Amazon and shares in Westfield have fallen 20pc on the stock exchange in Sydney since May last year.
Retailers in the US have been particularly hard hit with analysts at Credit Suisse estimating that nearly 9,000 stores will close there this year.
Asked why he chose to sell Westfield now, Lowy said: ‘It is appropriate to do it now. ‘Firstly because it’s a very good price for our shareholders and also, from our point of view and the company, I think we want to change our roles in the world. We would rather be investors than executives.
‘It’s more than a lifetime that I’ve put into this company. It’s time, from a personal point of view, for me to move on.’
The deal will see Lowy retire as chairman of Westfield and become chairman of a new advisory board at the combined group.
His sons Peter, 58, and Steven, 55, will also step down as cochief executives of Westfield although Peter will join the supervisory board of the enlarged company and the family will retain a substantial stake.
Unibail chief executive Christophe Cuvillier will keep the top job after the deal.
Outlining plans for cost- savings of nearly £90m a year once the takeover is complete, Cuvillier said he will continue to expand the Westfield brand. ‘All of us at Unibail have immense respect for what the Lowy family and the Westfield team have accomplished with the Westfield brand and the company’s iconic collection of world class shopping destinations,’ he said.
‘The acquisition of Westfield adds a number of new attractive retail markets in London and the wealthiest catchment areas in the United States. We believe that this transaction represents a compelling opportunity for both companies to realise benefits not available to each company on a standalone basis, and creates a strong and attractive platform for future growth.’
Frank Lowy added: ‘ We look forward to seeing Westfield continue to grow as part of the world’s premier owner of flagship shopping destinations.
‘For the assets I have spent my life building I could not imagine a better home for them than in this new company. Today is the second most important day in Westfield history – the most important day was in September 1960 when Westfield was born.’