France’s Klépierre, which specializes in commercial real estate, has agreed to buy Corio, its Dutch rival in a deal which would create the biggest owner of retail shopping centers in Europe.
The all-stock deal would value Corio which is a real estate investment trust, at around $9.7 billion or 7.2 billion euros. The company said that it would seek to buy 100 percent of the outstanding shares of Corio through an offer to shareholders.
The joint venture would own 182 shopping centers in 16 countries in Europe, worth approximately €21 billion.
Chairman of Klépierre, Laurent Morel said that they believe this is a unique opportunity to drive change in the retail landscape for the benefit of their clients and their customers, and employees and their shareholders.
This deal is expected to be completed in the first quarter of 2015, and both companies’ boards are recommending that shareholders accept the offer.
According to a statement issued by the companies, Klépierre’s largest shareholders, BNP Paribas and the Simon Property Group, and Corio’s largest shareholder, APG, the Dutch pension fund manager have conditionally agreed to support the transaction. APG has agreed to irrevocably tender its 30.6 percent stake to Klépierre from Corio.
Corio’s shareholders would receive 1.14 shares of Klépierre for every share of Corio they hold, under the proposed deal. On Monday, based on Klépierre’s closing price, the deal would imply a price of €41.40 per share of Corio.
On Monday, shares of Corio closed at €35.84 in Amsterdam.
Within three to five years after the deal, the combined company expects to achieve annual cost savings of about €50 million.
The new company which is yet unnamed is expected to list its shares on Euronext in Amsterdam and Paris.