Mall owner Simon Property Group Inc has agreed to buy Chelsea Property Group Inc for $3.5 billion, boosting its outlet shopping centres business and giving it a presence in Asia, the companies said on Monday.
Simon said it would pay $66 for each Chelsea share and operating partnership unit in a mix of cash and securities.
This represents a premium of 13 percent over Chelsea's closing stock price on Friday of $58.24 on the New York Stock Exchange.
Simon, which last year failed in a bid to take over rival Taubman Centres Inc, would also assume about $1.3 billion of Chelsea debt and preferred stock.
"Chelsea is the pre-eminent brand in the premium outlet industry, just as Simon is in the regional mall industry, and we've had three very successful joint ventures between the two companies," David Simon, Simon chief executive, said in a statement.
David Bloom, Chelsea chairman and CEO, said that "our international presence in Asia and Simon's presence in Europe will result in a combined organisation with a truly global platform."
For each Chelsea share, Chelsea shareholders will receive $36 cash, $15 of Simon common stock, based on a fixed conversion ratio of 0.2936 per Chelsea common share, and $15 of a new issue of Simon convertible preferred stock.
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