In a major retail mall deal, Simon Property Group is acquiring Taubman Centers.
The two companies have entered into a definitive agreement under which Simon will acquire an 80% ownership interest in The Taubman Realty Group Limited Partnership. Simon, through its operating partnership, Simon Property Group Limited Partnership, will acquire all of Taubman common stock for $52.50 per share in cash and the Taubman family will sell approximately one-third of its ownership interest at the transaction price while remaining a 20% partner in TRG.
Simon owns and operates retail, mixed use and other commercial properties across North America, Europe and Asia, and generated revenues of $5.76 billion in fiscal 2019. Taubman Centers generated revenue of $661.1 million in fiscal 2019. TRG is engaged in the ownership, management and/or leasing of 26 super-regional shopping centers in the U.S. and Asia. TRG’s ownership includes 24 high-quality retail assets, 21 in the U.S. and three in Asia, with 25 million feet of gross leasable area.
The existing executive team will continue to operate those properties under the leadership of Taubman chairman, president and CEO Robert Taubman, in partnership with Simon. The parties have agreed to work together to implement best practices and to achieve operational efficiencies. The consolidation will eliminate Taubman’s public company costs once the deal closes. The company anticipates funding the cash consideration of $3.6 billion with existing liquidity.
Simon chairman, president and CEO David Simon stated, “We are very pleased to announce this transaction, which will be immediately accretive to Simon’s FFO. By joining together, we will enhance the ability of TRG 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. I look forward to partnering with Bobby and the TRG executive team in this exciting new joint venture.”
The transaction is subject to customary closing conditions and is expected to close in mid-2020.