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Mall owner Kimco Realty buys rival Weingarten in $3.87 billion deal

Close-up of a sign for Kimco Realty, a real estate investment trust that is among the largest publicly traded operators of outdoor shopping malls, in the San Francisco Bay Area town of Daly City, California on 3 November 2017.

Smith/Gado collection | Stock photos | Getty Images

Mall owner Kimco Realty said on Thursday it would buy rival Weingarten Realty Investors for about $3.87 billion, which would add weight to its business as more and more sectors of the U.S. economy s open with the deployment of Covid-19 vaccines.

Kimco said in a statement it would pay Weingarten shareholders about $30.32 per share in cash and stock, a premium of nearly 11% to the company’s closing share price on Wednesday.

The deal will create a business with 559 malls anchored by an outdoor grocery store – one of the best performing parts of the commercial real estate sector during the pandemic as people rushed to stores to stock up on essential items.

An employee pushes grocery carts outside a Kroger Co. grocery store in Louisville, Kentucky.

Luke Sharret | Bloomberg | Getty Images

The company’s tenants will include Kroger, Whole Foods and Walmart, as well as discount retailers such as TJX Cos, Ross Stores and Burlington Stores.

Kimco shareholders are estimated to own around 71% of the combined company after the deal, which is expected to close in the second half of 2021.

Barclays and Lazard act as financial advisers to Kimco, while JP Morgan advised Weingarten.