Klépierre of France has entered a conditional agreement to purchase Corio, its Dutch rival, in a deal that would make them the largest retail shopping center owner in Europe.
Corio, a real estate investment trust, will be valued at €7.2bn ($9.7bn) in this all-stock deal. Klépierre is seeking to obtain 100% of the outstanding Corio shares by an offer to the shareholders. The joint company will own 182 shopping centers in 16 European countries, worth around €21bn. If the companies had amalgamated during 2013, it would have shown a rental net income in excess of €1.2bn.
The deal should be completed during the first quarter of 2015 and recommendations to shareholders from both boards are to accept the offer. The transaction is supported by the main shareholders in both companies. APG has agreed to tender its 30.6% share in Corio to Klépierre. Corio shareholders will receive 1.14 shares of Klépierre for each of their Corio shares. This implies a price of €41.40 for each Corio share based on Klépierre’s closing price Monday. On Monday, Corio’s shares closed at €35.84.
Once completed, the deal will add Germany, Turkey and the Netherlands to Klépierre’s portfolio and boost its Iberian, Italian and French holdings. The company is expecting to gain annual cost savings of around €50m within three to five years of this deal. The new company which has not yet been named may list its shares on Euronext in Amsterdam and Paris.