Simon Property Group Agrees to Acquire Taubman Centers for $3.6 Billion

Real Estate In-Depth | February 2020

The Westchester, White Plains

INDIANAPOLIS—Retail giant Simon Property Group reported on Feb. 10 its intent to acquire retail shopping mall owner Taubman Centers, Inc. in a deal valued at $3.6 billion.

Terms of the deal would have Simon acquire an 80% ownership interest in The Taubman Realty Group Limited Partnership. Simon, through its operating partnership, Simon Property Group, L.P., will acquire all of Taubman common stock for $52.50 per share in cash and the Taubman family will sell approximately one-third of its ownership interest at the transaction price and remain a 20% partner in TRG.

Taubman Realty Group, which is headquartered in Bloomfield Hills, MI, is engaged in the ownership, management and/or leasing of 26 super-regional shopping centers in the U.S. and Asia. TRG’s ownership includes 24 retail assets (including 21 in the United States and 3 in Asia), consisting of approximately 25 million feet of gross leasable area. The portfolio 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.

Among Taubman’s notable holdings in the New York metro region include the Stamford Town Center in Stamford, CT and the Mall at Short Hills (NJ). Among Simon’s seven New York holdings include The Westchester in White Plains; the Shops at Nanuet in Rockland County and Woodbury Common Premium Outlets in Central Valley (Orange County). The firm also owns 13 retail properties in New Jersey and two in Connecticut.

The transaction has been unanimously recommended by a Special Committee of independent directors of Taubman and approved unanimously by the Boards of Directors of both companies. Simon expects to fund the total required cash consideration of approximately $3.6 billion with existing liquidity.

Simon Property Group Chairman of the Board, CEO and President David Simon stated, “We are very pleased to announce this transaction, which will be immediately accretive to Simon’s FFO. 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.”

Robert S. Taubman, Chairman, President and CEO of Taubman, added, “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.”

He added, “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 transaction is expected to close in mid 2020.

BofA Securities is serving as financial advisor to Simon and Paul, Weiss, Rifkind, Wharton & Garrison LLP and Latham & Watkins LLP are serving as legal advisors. Goldman Sachs & Co. LLC is serving as financial advisor to Taubman and Wachtell, Lipton, Rosen & Katz and Honigman LLP are serving as legal advisors. The Special Committee of the Board of Directors of Taubman has retained Lazard as its independent financial advisor and Kirkland & Ellis LLP as its independent legal counsel.