Westfield sold to Unibail-Rodamco in $25bn deal

February 2018 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

February 2018 Issue

In a deal that many commentators are describing as a new era for the retail sector, French property group Unibail-Rodamco has completed a $25bn deal to acquire Australia’s Westfield Corporation, owner of Westfield Shopping Centres.

Under the terms of the agreement, Westfield securityholders will receive a combination of cash and shares in Unibail-Rodamco, valuing each Westfield security at $7.55. The proposed transaction has been unanimously recommended by Westfield’s board of directors and Unibail-Rodamco’s supervisory board.

The acquisition of Westfield – which owns and operates 35 shopping centres in the US and UK, encompassing approximately 6400 retail outlets and total assets under management of $32bn – represents a unique value proposition for both Unibail-Rodamco shareholders and Westfield securityholders.

Once the deal is complete, both parties will benefit from: (i) the creation of a global property leader with $72.2bn of gross market value that is strategically positioned in 27 of the world’s most attractive retail markets and cities; (ii) strong organic long-term growth prospects through the world’s largest development pipeline focused on flagship assets in key markets; (iii) an attractive dividend distribution policy, representing 85 to 95 percent of the new business combination’s pro forma recurring net earnings; and (iv) the progressive roll-out of the world famous Westfield brand in flagship shopping destinations.

“This deal is a natural extension of Unibail-Rodamco’s strategy of concentration, differentiation and innovation,” said Christophe Cuvillier, chairman of the management board and chief executive of Unibail-Rodamco. “It adds a number of new attractive retail markets in London and the wealthiest catchment areas in the US. It provides a unique platform of superior quality shopping destinations supported by experienced professionals of both Unibail-Rodamco and Westfield. We look forward to welcoming Westfield’s securityholders as shareholders in the new Group and continuing to create significant value for our existing and new shareholders.”

Following the completion of the transaction, Mr Cuvillier will be the group chief executive and Colin Dyer will be group chairman of the supervisory board. Furthermore, a newly created advisory board, to be chaired by Sir Frank Lowy, will provide independent advice from outside experts on strategy.

“This transaction is the culmination of the strategic journey Westfield has been on since its 2014 restructure,” said Sir Frank Lowy, chairman of the Westfield board of directors. “We see this transaction as highly compelling for Westfield’s securityholders and Unibail-Rodamco’s shareholders alike. Unibail-Rodamco’s track record makes it the natural home for the legacy of Westfield’s brand and business. We look forward to seeing Westfield continue to grow as part of the world’s premier owner of flagship shopping destinations.”

Acting as financial advisers to Unibail-Rodamco are Deutsche Bank and Goldman Sachs. Darrois Villey Maillot Brochier, Allens, NautaDutilh, Shearman & Sterling LLP, Clifford Chance Europe LLP and Capstan Avocats are acting as legal advisers. Tax advisers are Lacourte Raquin Tatar, Loyens & Loeff and Allen & Overy.

For Westfield, Rothschild & Co is acting as lead financial adviser, and Jefferies and UBS are acting as joint financial advisers. King & Wood Mallesons, Skadden Arps, Slate, Meagher & Flom LLP and Debevoise & Plimpton LLP are acting as legal advisers, while Greenwoods and Herbert Smith Freehills are acting as Australian tax advisers.

The transaction is conditional upon the satisfaction of customary conditions, including Australian court approval and the approval of Unibail-Rodamco shareholders and Westfield securityholders, and is expected to close in the first half of 2018.

Mr Cuvillier concluded: “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.”

Fraser Tennant