Mall Giant Simon Acquires Taubman for $3.6 Billion

Simon Property Group and Taubman Centers Inc., two titans of the American mall market, will join forces in a deal where Simon acquires Taubman for $3.6 billion or $52.50 per share, it was announced Feb. 10.

The Indianapolis-headquartered Simon owns or has an interest in 233 retail real-estate properties including Del Amo Fashion Center in Torrance, Calif. and Fashion Valley in San Diego. It recently made headlines for serving as one of the stalking-horse bidders aiming to acquire bankrupt retailer Forever 21 Inc.

Taubman, based in Bloomfield Hills, Mich., owns 26 shopping centers around the United States and Asia, including the Beverly Center in Los Angeles.

Simon will acquire an 80 percent ownership interest in The Taubman Realty Group Limited Partnership. Through its operating partnership, Simon Property Group, L.P., the Indianapolis-headquartered company will acquire all of Taubman’s common stock for $52.50 per share in cash. The Taubman family will sell approximately one-third of its ownership interest and remain a 20 percent partner in its company Taubman Realty Group Limited Partnership. The deal was approved unanimously by boards of directors for both companies, said David Simon, the president, chief executive officer and chairman of the board of Simon.

“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,” Simon said.

The deal will not change how Simon and Taubman malls operate, said Maria Mainville, Taubman’s director of strategic communications.

“Both Taubman and Simon will continue to operate as usual, and as separate companies until the recently announced transaction closes,” Mainville said. “After the transaction is completed, Taubman expects to operate much as we do today, including related to the ownership and leasing of our properties and how we serve our tenants and shoppers.”

The market seemed to respond favorably to the deal. Shares in Taubman stock increased 53 percent, according to media reports.

Both companies recently announced results for the fourth quarters of their 2019 fiscal years. Simon reported net income attributable to common stockholders was $510.2 million, or $1.66 per diluted share. It’s compared to $712.8 million, or $2.30 per diluted share in 2018, according to a Simon statement. Retailer sales per square foot was $693, which represented an increase of 4.8 percent during its 2019 fiscal year. Taubman’s comparable center net operating income experienced a dip of 0.1 percent, according to media reports.