At the end of last year, Unibail-Rodamco SE, a company that Bloomberg calls “Europe’s largest commercial landlord” bought the Australian Westfield Corp for the equivalent of around $16 Billion. This is a significant transaction because it is one of the largest deals in the Asia-Pacific region, and is the largest to ever occur within Australia. This deal could have come at a good time for Unibail, as its stocks were reported to have fallen by as much as four percent, before this occurred. The acquisition, started in 2014 and took almost four years to finalize.
Westfield was founded by the billionaire Frank Lowy. At the time, it only consisted of one mall that was located in the outside of Sydney, Australia. Now, it is one of the largest shopping center owners in the world, with locations all over the United States and the United Kingdom. Lowy, who has been the owner for over fifty years, has since handed over the CEO job to his son, Peter Lowy.
Chief Financial Officer of Unibail-Rodamco, Jaap Tonckens said in an interview with Bloomberg Television that he thinks that the U.S. would be a difficult place to build cheap, low cost malls, so he believes that “I think we’ll focus on improving them, ride out the storm and see where we go from there.” Though the acquisition could prove to be successful, at the moment transition could be difficult; many Westfield malls of high quality, should not be renovated.
As Westfield is concerned, the merger could look to be profitable for both companies. Frank Lowy said “[this acquisition]is the culmination of the strategic journey Westfield has been on since its 2014 restructure. We see this transaction as highly compelling for Westfield’s security holders and Unibail-Rodamco’s shareholders alike. Unibail-Rodamco’s track record makes it the natural home for the legacy of Westfield’s brand.” The jury is still undecided on this endeavor, yet it appears that this could be the right step for both companies. The issue is that its to early to see whether the malls reflect one anothers’ style and business models.