Unibail-Rodamco has agreed to acquire Westfield Corporation in a deal that will create a €61.1bn global shopping centre owner.

Paris-based Unibail-Rodamco is paying US$7.55 (€6.41) per share, reflecting a 17.8% premium to the stock’s closing price and valuing the Australian company at US$24.7bn.

Westfield, founded in Australia, today owns mostly European and US malls with a gross market value (GMV) of €18.1bn. Unibail-Rodamco owns €43bn of European shopping centres in Europe.

The merged company will own 104 shopping centres in 27 markets.

Westfield’s board has unanimously recommended the takeover proposal.

The merger comes less than a week after a similar tie-up between two other listed owners of European shopping centres, Hammerson and Intu.

Speaking at a press conference, Westfield founder Frank Lowy said the deal was a reflection of consolidation among global retail landlords and pressure on retail.

He said Australia’s largest takeover was the “culmination of the strategic journey Westfield has been on since its 2014 restructure”.

He said: “We see this transaction as highly compelling for Westfield’s securities holders and Unibail-Rodmaco’s shareholders alike.”

Describing it as “obviously a day of mixed emotions,” Lowy said he was “100% comfortable” with the decision, and that the Lowy family would move from being executives to investors.

Lowy founded Westfield in 1960 when he built a small shopping centre in Blacktown in Sydney. Today, its best-known centres are Westfield London, which is undergoing a £600m (€680m) expansion, and Century City in Los Angeles, where Westfield is completing a US$1bn facelift.

Westfield recently opened its flagship mall in the US, Westfield World Trade Centre, in New York, and has stakes in 18 suburban US shopping centres, three of which are wholly-owned.

Christophe Cuvillier, chairman of the management board and chief executive of Unibail-Rodamco, said: “It adds a number of new attractive retail markets in London – and the wealthiest catchment areas in the US.” 

He said: “We believe this transaction represents a compelling opportunity for both companies to realise benefits not available to each company on a standalone basis, and creates a strong and attractive platform for future growth.”

The merged company will have a development pipeline of €12.3bn. Westfield is currently building its first mall in Italy, Westfield Milan, along with Westfield Croydon in the UK, due for completion after 2020.

The acquisition is also expected to produce €100m in annual cost savings.

The transaction is conditional upon satisfaction of customary conditions, including Australian court approval and the approval of Unibail-Rodamco shareholders and Westfield security holders.

Westfield will put the deal to a shareholder vote next year, as part of a scheme of arrangement. The deal is expected to close in the first half of 2018.