Brookfield Property Partners is set to acquire all the outstanding shares of common stock of USA based GGP for $9.25 billion other than the shares currently held by Brookfield Property Partners and its affiliates.
The deal consists of $9.25 billion in cash and about 254 million shares in Brookfield Property and the new REIT, for a 61 percent cash consideration and 39 percent in equity.
Brookfield Property Partners will gain full control of the second-largest U.S. mall owner amid tumult in the retail industry with the acquisition. According to the statement by the company, GGP shareholders will receive $23.50 a share in cash, or either one Brookfield unit or one share of a new real estate investment trust for each share they own. The deal has increased from November proposal and is valued at almost $15 billion according to Bloomberg.
As the shares of mall companies are finding hard to compete with e-commerce giants, Brookfield real estate unit of Toronto-based Brookfield Asset Management Inc., is buying these shares. Brookfield has been buying and revamping shopping centers to take advantage of the land they occupy in urban areas.
According to Daniel Hurwitz, GGP’s lead director and chairman of the special committee, the deal was attractive because of the increased cash portion of the deal and the ability to receive shares in a newly listed REIT. He also added:
“The offer provides GGP shareholders certainty of value, as well as upside potential through ownership in a globally diversified real estate company.”
About Brookfield Property Partners
Headquartered in Bermuda, Brookfield Property Partners LP invests in real estate. Focusing on properties located in North America, Europe, Australia and Brazil, Brookfield Property Partners LP owns, operates and invests in commercial properties.
About GGP Inc.
GGP INC is a S&P 500 company that focuses on owning, managing, leasing and redeveloping high- quality retail properties throughout the US. Headquartered in Chicago, Illinois, GGP Inc. employs around 1700 employees.