Simon pulls out of merger deal with Taubman
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US mall operators Simon Property Group and Taubman Centers have called off their planned merger, citing the impact of Covid-19 on the retail industry.
Simon was to buy an 80-per-cent interest in Taubman, with the Taubman family retaining a 20 percent stake in a US$3.6 billion deal. Taubman owns, manages and/or leases 23 super-regional shopping centres in the US and three in Asia via its Hong Kong-headquartered Taubman Asia business.
Simon says it was pulling out of the deal because it believed Taubman’s properties were “disproportionately hurt” by the pandemic due to their location in densely populated cities and tourist locations and had high-end tenants whose sales had been hit particularly hard this year.
However, Taubman has indicated it will fight to protect the deal, arguing the decision was without merit and plans seek damages from Simon.
The Asian properties which would have been part of the merger are the Starfield Hanam in South Korea, and the Chinese properties CityOn Xi’an and CityOn Zhengzhou.
Questions & Answers
Q.What was the total value of the merger deal Simon Property Group was withdrawing from?
What was the total value of the merger deal Simon Property Group was withdrawing from?
The merger deal, which would have seen Simon acquire an 80-per-cent interest in Taubman, was valued at US$3.6 billion. The Taubman family intended to retain a 20 percent stake in the business.
Q.What reasons did Simon Property Group give for pulling out of the merger agreement?
What reasons did Simon Property Group give for pulling out of the merger agreement?
Simon stated that Covid-19 had disproportionately impacted Taubman’s properties due to their urban and tourist locations. High-end tenants at these centres had experienced particularly severe sales declines this year.
Q.What is Taubman's response to Simon Property Group's decision to terminate the deal?
What is Taubman's response to Simon Property Group's decision to terminate the deal?
Taubman intends to challenge Simon's decision, asserting it lacks merit. The company plans to pursue damages from Simon Property Group to protect the terms of the original deal.
Q.Which specific Asian properties were included in the planned merger deal?
Which specific Asian properties were included in the planned merger deal?
The merger would have included three Asian properties operated by Taubman Asia: Starfield Hanam in South Korea, and the Chinese properties CityOn Xi’an and CityOn Zhengzhou.
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