Shopping center owner Kimco Realty buys rival Weingarten in $3.87 billion deal

KEY POINTS

• Kimco said in a statement it would pay Weingarten shareholders about $30.32 per share in cash and stock, a near 11% premium to the company's closing share price on Wednesday.
• The deal will create a company with 559 open-air grocery-anchored shopping centers.
• The deal is expected to close in the second half of 2021.

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

Smith Collection/Gado | Archive Photos | Getty Images

Shopping center owner Kimco Realty said on Thursday it would buy rival Weingarten Realty Investors for about $3.87 billion, adding heft to its business just as more parts of the U.S. economy open with the rollout of Covid-19 vaccines.

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

The deal will create a company with 559 open-air grocery-anchored shopping centers -- one of the better 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 Sharrett | 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 about 71% of the combined company's equity after the deal, which is expected to close in the second half of 2021.

Barclays and Lazard are acting as financial advisors to Kimco, while J.P. Morgan advised Weingarten.