Owner of Victoria Gate swoops for rival Intu

Shopping centre owner Hammerson, which last October opened the Victoria Gate in Leeds, is to buy rival Intu  – creating a £21bn company.

In a statement released this morning, Hammerson said the deal will “create a pan-European portfolio of high-quality retail and leisure destinations, with enhanced exposure to high-growth markets and which will benefit from evolving consumer trends.”

Hammerson said that, as part of the deal, some properties would be sold, which would result in a £2bn windfall for the company.

Intu has 17 shopping centres across the UK, including the Trafford and Arndale Centres in Manchester, Victoria Centre in Nottingham and Metrocentre in the North East. Hammerson has a portfolio of major shopping centres including the Bullring in Birmingham.

The boards of Hammerson and Intu said there was strategic rationale for the acquisition, which they said would “bring together their high-quality retail property portfolios and their combined expertise to create a leading European retail REIT with a strong income profile and superior growth prospects.

Adding: “Both Boards believe that following the Acquisition, the Enlarged Group will be better placed to enhance its position in its geographic markets and across its retail formats, with a more efficient and adaptable platform allowing it to respond to fast changing consumer preferences and retail trends.”

The new company, Hammerson Plc,  will be led by David Atkins, chief executive, and Timon Drakesmith, chief financial officer. John Whittaker, deputy chairman of Intu, will become deputy chairman of the new group.The company  will have six directors nominated by Hammerson and four directors nominated by Intu.

David Tyler, chairman of Hammerson, said: “This transaction will deliver real value for shareholders. The financial strength of the Enlarged Group and its strong leadership team will make it well-placed to take advantage of higher growth opportunities on a pan-European scale.”

David Atkins, chief executive of Hammerson, said: “This marks an exciting milestone in the history of Hammerson. Bringing together the high-quality portfolios of both companies establishes Hammerson as a larger, leading European retail REIT, enhances shareholder returns and supports opportunities for long-term growth. The acquisition creates a leading pan-European platform of desirable retail and leisure destinations which are better positioned to serve the needs of our retailers, excite our customers and support our partners and communities. I hold Intu’s high-quality centres in high regard and I look forward to working with a strengthened team to enhance the performance of our entire portfolio.”

John Strachan, chairman of Intu and proposed senior independent director of the enlarged group, added: “A combination of both Intu and Hammerson will create a more resilient, diversified and stronger group that we believe will benefit all our stakeholders. Intu offers high-quality retail and leisure destinations in the UK and Spain, which when merged with Hammerson’s own top-quality assets in the UK, in France and in Ireland, present a highly attractive proposition for retailers and shoppers in Europe’s leading cities. I am proud of the financial and operational success that Intu’s management team has delivered and pleased to see that the intu brand will continue.”