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Lowy family sells Westfield empire for $32 billion

Westfield Topanga in California.

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After 57 years in business, Sir Frank Lowy has agreed to sell his shopping centre empire, Westfield Corporation, to European real estate giant Unibail-Rodamco for $32 billion.

Westfield shareholders will receive a combination of cash and shares, with a price of $10.01 per share.

Appearing via telecast from London, Sir Lowy said it was a bittersweet moment but a decision he was comfortable with, and a culmination of the strategic journey Westfield has been on since 2014.

“For the assets I have spent my life building I could not imagine a better home for them than in this new company,” he said. “Today is the second most important day in Westfield history—the most important day was September 1960 when Westfield was born.”

The takeover deal was struck during six weeks of negotiations and will see Unibail-Rodamco maintain the Westfield brand. It will create a global property leader with US$72.2 billion of gross market value in 27 of the world’s most attractive retail locations.

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Unibail-Rodamco currently has a presence in 11 European countries, including large shopping centres in major European cities and as well as offices and convention centres in the Paris region.

In a statement, Unibail-Rodamco said the acquisition of Westfield was a “perfect strategic fit” as it will deliver the highly attractive markets of London and the wealthiest catchment areas in the US.

“In addition to benefiting from the strong embedded growth potential, Unibail-Rodamco expects to capitalise on Westfield’s strong development and investment track record and know-how,” the company said.

Lowy to retain tech platform

The Lowy family will retain control of Westfield’s retail technology platform, OneMarket, which is being spun off into a new company. Speaking at a briefing this morning, Steven Lowy, who will remain as OneMarket chairman, said the group always planned to focus on developing the platform.

“We are focused on building an industry platform rather than just improving the technology in our own business,” he said. “It is designed to connect retailers with brands, with consumers, with technology partners and venue partners—malls and other physical real estate.”

Impact of Amazon

Steven Lowy also spoke about the impact of Amazon and the growth of online retail more broadly, and said he sees ecommerce as an opportunity rather than a threat.

“There’s a lot made of Amazon’s impact and the growth of online, and that’s clearly a structural change that has happened in society, but it’s not really a motivation for us,” he said.

“We’ve been adapting and evolving our shopping centres…to be able to continually be attractive to consumers and retailers, notwithstanding the growth of online…

“We see opportunities the opposite way—physical real estate has not yet captured the benefits of the combination of online, and we see some great opportunities there.”

The transaction is expected to complete in the second quarter of 2018.

 

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