France's Carrefour is buying a portfolio of 127 shopping malls in France, Spain and Italy from real estate group Klepierre for 2 billion euros ($2.75billion) in bid to help it revive its flagging European hypermarkets.
Owning both the mall and hypermarket within it will bring in rental income which Carrefour can use to finance the renovation of 150 of its 220 French hypermarkets over three years as it fights to lure back lost customers.
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The new company -- with over 800,000 square meter of retail space and assets of 2.7 billion euros -- will be made up of 1.8 billion euros of equity, some 42 percent owned by Carrefour and the remainder by institutional investors.
It will also be backed by 900 million euros of debt, Carrefour said on Monday.
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The transaction, which remains subject to a final agreement between the parties and approval of regulatory authorities, should close in the first-half 2014.
Carrefour, the world's second-largest retailer, has struggled for years in Europe, partly due to continued reliance on the hypermarket format it pioneered, as time-pressed customers shop more locally and online and buy non-food goods from specialists.
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