Simon Property Group will acquire an 80% ownership interest in Taubman Realty Group (TRG) in a deal valued at $3.6 billion, representing a 51% premium on Taubman’s share price. Taubman is involved in the ownership, management and leasing of 21 retail shopping centers in the U.S. and three in Asia.
TRG President and CEO Robert Taubman will continue leading the company in partnership with Simon. However, the Taubman family will sell one-third of their stake as part of the deal, bringing their ownership down to 20% of the company.
The deal is expected to help TRG enhance its retail environments and enable investments that will drive innovation and new experiences for both retailers and shoppers. The transaction is expected to close within the next six months.
“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,” said David Simon, CEO and Chairman of the Board at Simon in a statement. “I look forward to partnering with [Robert] and the TRG executive team in this exciting new joint venture.”
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Simon is known for operating what Kearney Partner Michael Brown called “’A’ malls,” which are spaces where shoppers feel like they can come and spend the day. These shopping centers are proving better at weathering retail’s current negative trends than “B” and “C” malls, which often lack experiential amenities.
Simon also is active in the retail side of the business. The operator is part of a consortium of landlords looking to acquire Forever 21 out of bankruptcy, just the latest retail-focused deal on Simon’s part.
