Westfield Group (WDC) and Westfield Retail Trust (WRT) has announced a proposal to merge WDC’s Australia and New Zealand business with WRT to form a new entity known as Scentre Group while WDC’s international business become Westfield Corporation.

The two new entities will be listed on the ASX and have separate boards and management teams but will maintain the Westfield brand on their shopping centres.

Frank Lowy, chairman of Westfield Group, will become chairman of both new entities.

“Westfield’s international business and its Australian and New Zealand business have both growth in scale and quality to the stage where they can now stand on their own,” he said.

“They can each operate more efficiently and generate greater growth and value for investors, by being independent.”

The proposal has the unanimous support of the WDC board and the independent directors of the WRT board.

WRT chairman Richard Warburton said the independent directors of WRT believed the proposal is in the best interests of WRT securityholders.

“We are delighted that as the result of this proposal, WRT will gain ownership of WDC’s industry leading team in Australia and New Zealand,” she said.

“It provides WRT the opportunity to further strengthen its portfolio and become fully integrated and self-managed, thereby generating greater value potential for investors.”