A $15.8 Billion Acquisition: Unibail-Rodamco acquires Westfield
January 10, 2018
As more people shift to the convenience of online shopping, the dent made to brick-and-mortar stores gets significantly larger. The latest news in this developing saga of online shopping versus retail stores is Westfield’s sale to Unibail-Rodamco SE for $15.8 billion.
Westfield’s beginnings go back to 1959 when Australian billionaire Frank Lowy and his partner John Saunders opened a shopping mall in Blacktown, a Sydney suburb. The company went global, opening Westfield malls in both the U.K. and the U.S. After Saunders sold his interests and left the company, the Westfield brand continued to expand. Frank Lowy’s sons Steven and Peter Lowy would later become co-CEOs. Westfield operates 35 malls in the U.S. and the U.K.
Although Westfield is not excited about the price offered by Unibail-Rodamco, Frank Lowy is happy to step down as an executive and remain on board as an investor, owning 9% of Westfield. “I could not imagine a better home for them than in this new company,” Lowy said. Frank Lowy will see Westfield, under the banner of Unibail-Rodamco, expand into Europe. The new deal offers 104 Westfield shopping centers in 13 countries. Lowy will chair an advisory board at Unibal-Rodamco, offering the company strategic advice.
The acquisition was an on-and-off dialogue between the two companies for four years. Westfield brings to the table high-quality shopping malls and Unibail-Rodamco offers new destinations such as London, Milan, Hamburg, Brussels, Paris, San Jose, Lyon, and other major cities.
Unibail-Rodamco is not caving to online shoppers. The company is planning a major overhaul of Westfield’s malls, creating even larger malls that can stand up to online shopping. They have invested $9.5 billion in similar planned projects.
Unibail-Rodamco is Europe’s largest commercial landlord, specializing in shopping centers. Based in Paris, Unibail-Rodamco is a merger of the French company Unibail and the Dutch company, Rodamco. The company owns 71 shopping centers in Europe.