"The new company will play the role of market leader in various European geographic areas," says Uniball CEO Guillaume Poitrinal, in a statement. "Capitalizing on the complementary strengths of both companies, we will be able to seize new growth opportunities and deliver enhanced returns to our shareholders." The existing retail owned by both companies services 700 consumers annually, and the merger provides rights to develop more than one msf of additional retail space, Unibail estimates.

As part of the exchange offer, Rodamco investors will be paid a 15% premium to the stock price as of closing on April 5. That amounts to a common share capital value of 11.2 billion euros, or about 124.8 euros per share as of that date. PGGM, the owner of the largest block with 25% of Rodamco shares, has expressed "strong support" for the takeover, officials involved in the merger maintain in filed documents.

To be headquartered in the Netherlands and registered in Paris, the company will have a two-tiered governance comprised of a supervisory board and a management board, the former of which will be led by Robert F.W. van Oordt, head of Rodamco's existing supervisory board. Poitrinal will be chairman of the management board and CEO of the combined group. Current Radamco CEO Maarten Hulshoff will not serve on the management board, stating that he wants to provide the leadership "all the room to fully explore the opportunities of this great new company," an entity he predicts will fare well due to its sheer might.

"The development skills of Unibail and the European retail footprint of Radamco, as well as our investment skills and experience, provides a unique platform for long-term value creation," Hulshoff says. Just bringing the two operations together should yield up to 65 million euros in reduced redundancies by 2012, proponents of the deal also maintain.

Rodamco Europe has most of its holdings are in the Nordic region. Increasingly, however, the company has been exploring new territories, including central Europe as well as Moscow, announcing a partnership there in late 2006. Besides the retail empire, the new company will also have 6.7 million square feet of office space and anticipates future growth in the convention and tradeshow markets. The combined value of all the real estate is estimated at 21.7 billion euros and rental income of 975 million euros.

The closing of the merger is slated for early June. The financial advisors for Rodamco are Goldman Sachs International and UBS Investment Bank, with Clifford Chance LLP serving as legal advisor. Loyens & Loeff and Jones Day are the company's tax advisors, whereas CMB Bureau Francis Lefebvre and CMS Derks Star Busmann are serving in that capacity for Unibail. That firm's financial advisors are Morgan Stanley & Co. Ltd., ABN Amro Corporate Finance and Perella Weinberg Partners, while legal advisors are Darrois Villey Maillot Brochier and NautaDutilh NV.

Instant Insights /

Unibail To Buy Rival Rodamco for $15B

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