SAN DIEGO-Kimco Realty Trust is acquiring Pan Pacific Retail Properties, a locally based owner of 138 West Coast shopping centers, for about $4 billion. Kimco, based in New Hyde Park, NY, will pay $70 per share for Pan Pacific, acquiring $2.9 billion in equity and $1.1 billion in debt.

Pan Pacific's stock closed on Friday at $70. Kimco, which has received $3 billion in financing commitments for the deal, may issue $10 per share of its common stock to Pan Pacific shareholders as part of the transaction. Executives expect the deal to close in the fourth quarter.

"This merger fits well with our strategy of owning the highest quality shopping center portfolio, growing our management business and generating solid investment returns for our partners and shareholders while conserving our own equity capital," says Milton Cooper, Kimco's chairman and chief executive officer, in statement. Kimco currently owns 1,117 properties across the country.

In April, Kimco management announced a deal with Schostak Brothers & Co. to buy a portfolio of 28 shopping centers in 12 states for $100.5 million. With a development pipeline of $1.5 billion, Kimco also has 41 centers under development in the US, Mexico and Canada that are planned to total 15.1 million sf.

During Pan Pacific's most recent quarter, which ended March 31, the firm reported a 97.1% occupancy rate and 20.5% year-over-year lease increase. The firm's FFO jumped 6.1%, to $40.5 million, and total revenue jumped 7.3%, to $79.4 million.

The Kimco-Pan Pacific deal is already the second large retail transaction so far in this young week. Centro Watt, an Australian and US joint venture, has also agreed to buy strip-mall owner Heritage Property Investment Trust of for $3.2 billion including debt.