In a major move of consolidation among mall operators, Simon Property Group has agreed to purchase an 80 percent stake in The Taubman Realty Group for about $3.6 billion in cash, the REITs announced Monday morning. The deal, which has been unanimously approved by the boards of the both firms, is expected to close in mid-2020.
Through the transaction, Simon Property Group Inc. will acquire all of Taubman’s common stock through its operating partnership, Simon Property Group L.P., for $52.50 per share in cash. The Taubman family will also sell roughly one-third of its ownership interest and will remain a 20 percent partner in Taubman Realty Group.
The two NYSE-listed companies have been mulling a merger since late last year, Bloomberg reported last week. Bloomfield Hills, Mich.-based Taubman owns 24 high-quality retail assets totaling roughly 25 million square feet, including 21 properties in the U.S. and three in Asia. Simon Properties, an S&P 100 firm headquartered in Indianapolis, owns interests in 235 retail properties spanning 191 million square feet worldwide, according to its corporate website.
Taubman’s property portfolio will continue to be managed by its existing executive team, led by the Chairman and CEO Robert S. Taubman, in partnership with Simon Properties.
“By joining together, we will enhance the ability of TRG (Taubman Realty Group) 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,” noted David Simon, chairman of the board and CEO of Simon Properties in a prepared statement.
The merger is one of the largest retail real estate deals since Canada’s Brookfield Property Partners LP acquired U.S. mall owner GGP Inc. for $15.2 million in 2018.