Regency Centers, Equity One agree to $5B merger

Regency Centers Corp. and Equity One have announced a $5 billion merger agreement that will form a combined company under Regency’s name of 429 largely grocery-anchored centers encompassing about 57 million square feet.

The all-stock deal will create a new company with a total market capitalization of $15.6 billion, making it the largest REIT by equity value in the shopping center index, according to a joint statement by the companies.

“Bringing together these two highly complementary businesses creates a best-in-class platform capable of delivering sustained growth and value creation over the long-term,” said Martin E. “Hap” Stein, Jr., chairman and CEO of Jacksonville, Fla.–based Regency, in a prepared statement. “Shareholders of both companies are poised to benefit from an expanded presence in top metro areas, a higher organic growth profile, expanded development and redevelopment program, and greater tenant diversity.”

“This merger will be a transformative event for both companies,” said David Lukes, CEO of Equity One, which is based in North Miami Beach, Fla. “The alignment of our respective portfolios, development/redevelopment pipelines, industry-leading operations, and access to a lower cost of capital, opens us to new avenues of growth that will benefit all shareholders.”

Regency Centers operates 307 retail properties throughout the U.S. encompassing more than 42.1 million square feet. Equity One has over 120 properties, of which 98 are retail, plus five non-retail properties. In all Equity’s portfolio totals some 12.3 million square feet of gross leasable area.

Stein will serve as chairman and CEO of the new company, and Regency’s President and CFO Lisa Palmer will retain her titles. Chaim Katzman, chairman of Equity One and Gazit-Globe will be on the board and hold the title of non-executive vice chairman of the combined company. Gazit-Globe, and Israel-based international development company, owns about 34 percent of Equity One’s outstanding stock. It, along with the boards of Regency and Equity One, voted unanimously in favor of the deal. The merger will go before shareholders in the first half of next year.

Other Regency executives retaining their titles under the merged companies are Executive Vice President of Development Mac Chandler and Executive Vice President of Operations James Thompson. John C. Schweitzer will continue to serve in his role as lead director for Regency.