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Simon to buy Taubman Centers in all-cash mega-deal

The nation’s largest mall operator is getting bigger.

Simon Property Group Inc. has entered into an agreement to acquire Taubman Centers in a deal valued at approximately $3.6 billion. Simon will acquire all of Taubman’s common stock for $52.50 a share in cash (a 51% premium to Taubman closing price on Friday, Feb.7). The Taubman family, which is selling approximately one-third of its ownership interest, will retain a 20% stake in Taubman Realty Group.

Taubman owns, manages or leases  26 premium shopping malls in the U.S. and Asia, including The Mall at Short Hills in Short Hills, N.J., and Beverly Center in Los Angeles. The company will continue to be managed by its existing executive team under the leadership of Taubman chairman, president and CEO Robert S. Taubman, in partnership with Simon. Simon and Taubman said they will together “to implement best practices to achieve operational efficiencies and will eliminate Taubman's public company costs immediately following closing.”

Simon, which recently partnered with Authentic Brands Group and Brookfield Property Partners to make a bid for bankrupt retailer Forever 21, said it expects the deal with Taubman to immediately boost its funds from operations, adding at least 3% on an annualized basis. Among Simon’s properties are Copley Place in Boston, and King of Prussia Mall in King of Prussia, Pa. 

“By joining together, we will enhance the ability of TRG 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,” David Simon, chairman, president and CEO, Simon. 

"Since Taubman Centers' founding 70 years ago, we have built a portfolio of high-quality assets and continuously adapted to the evolving retail landscape. I am proud of all that this company's talented employees have achieved and am thrilled to have the opportunity to join together with Simon through this joint venture,” said Robert Taubman. “Over the last few years, David and I have developed an excellent personal relationship and importantly, Simon shares our commitment to serving retailers, shoppers and the communities in which we operate. The Board and I are confident that Simon is the ideal partner to help us build on our progress."

The deal, which is subject to regulatory and shareholder approval, is expected to close by mid-2020. The Taubman family, which owns about 29% of the voting stock, has agreed to vote in favor of the deal. 

This is a developing story. Check back later for updates.

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