MIAMI-An entity owned equally by Lennar Corp. and LNR Property Corp., both based here, has entered into an agreement to acquire The Newhall Land and Farming Co, of Los Angeles County, Calif.

The transaction would be in merger form. It is subject to approval by Newhall Land’s unitholders. The company’s board of directors has approved the merger and has voted to recommend that the unitholders vote to approve the merger. Lennar and LNR’s boards of directors also have approved the deal.

Under the agreement, Newhall Land’s unitholders will get $40.50 per partnership unit in cash, which will rise at 5% per annum beginning 270 days from July 21. The total purchase consideration, after payment of employee options, would be about $990 million plus liabilities.

The transaction also is subject to approval by the California Public Utilities Commission.

The transaction is expected to close by mid-2004. At the same time as the deal’s closing, LNR will buy existing income-producing commercial assets, and Lennar will option certain home sites from the venture.

LNR and Lennar have 45 days to perform due diligence concerning Newhall Land and will be able to terminate their agreement and forfeit their $5 million deposit during that period. Under the agreement, after the 45 days, LNR and Lennar will deposit an extra $25 million into escrow.

“Newhall Land is an excellent franchise, which will be a wonderful complement to the operations of the venture partners,” according to Jeffrey Krasnoff, president and CEO of LNR Property Corp., and Robert Strudler, chief operating officer of Lennar Corp. “With our combined expertise in residential and commercial development, we will continue to develop this premier master-planned community in one of the fastest growing and most land constrained markets in the country. This transaction also gives the partners, individually, the opportunity to access future residential and commercial sites in the highly desirable Los Angeles market.”

Publicly traded Newhall Land is a leading community planner in north Los Angeles County. LNR Property Corp., also publicly traded, is a real estate investment, finance and management company. Lennar Corp., also public, is one of the nation’s largest homebuilders.

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