Sydney: French property giant Unibail-Rodamco is to buy Australia’s Westfield shopping mall operator, the two groups said Tuesday, in what would be the biggest-ever corporate takeover in Australia.

The deal values Westfield at $24.7 billion and would create “a global property leader”, they said in a statement.

The future combined portfolio of the merged companies would include key centres like Westfield London, Westfield World Trade Center in New York, Les Quatre Temps near Paris and the Forum des Halles in the heart of the French capital.

The agreement would “create the world’s premier developer and operator of flagship shopping destinations”, they said.

Tuesday’s announcement comes as mall operators embark on a consolidation drive as they face increasingly tough competition from online shopping sites such as Amazon, which this month launched in Australia.

Westfield’s share price is down about 10 per cent in 2017.

“The acquisition of Westfield is a natural extension of Unibail-Rodamco’s strategy of concentration, differentiation and innovation,” said Christophe Cuvillier, chief executive officer of Unibail-Rodamco.

“It adds a number of new attractive retail markets in London and the wealthiest catchment areas in the United States.

“We believe that this transaction represents a compelling opportunity for both companies to realise benefits not available to each company on a standalone basis, and creates a strong and attractive platform for future growth.” The statement said the proposal had been “unanimously recommended by Westfield’s board of directors and Unibail-Rodamco’s supervisory board”.

Unibail-Rodamco is Europe’s largest commercial landlord and the purchase comes as it offloads smaller assets in Europe to focus on bigger shopping centres, which are likely to be better suited to fending off the march of e-commerce giants.

But some analysts were not persuaded by the deal’s logic.

“It seems the owners of retail property think bigger is better,” said Jasper Lawler, Head of Research at London Capital Group.

“The trouble is that competition from online shopping means declining shopping centre footfall is global phenomenon”, he said, adding that “Unibail-Rodamco is in-effect doubling down on an industry undergoing a generational decline”.

On the Paris stock exchange, where Unibail is listed on the benchmark CAC-40 index, its shares slipped 2,3 per cent in morning deals to 218.90 euros.

Agence France-Presse