Nod for Federation, Novion merger
Shopping centre owners Federation Centres and Novion Property Group will merge to create one of Australia’s leading real estate investment trusts with more than $22 billion in assets under management after Novion shareholders overwhelmingly voted in favour of the merger.
Federation Centres and Novion own or co-own 65 and 27 shopping centres, respectively, across Australia and when combined, would be one of WA’s biggest shopping centre landlords.
Federation Centres chief executive and managing director, Steven Sewell said combining the two organisations would create a shopping centre owner and manager with an enhanced capacity to deliver great retail experiences for Australian consumers while also delivering sustainable returns to the merged group’s security holders.
“Our focus is on ensuring the merged group takes all the steps necessary to enable the realisation of the benefits of the merger including assumed refinancing and cost savings and other strategic synergies over time,” Mr Sewell said.
“There is also expected to be improved future growth opportunities from the capability to optimise the combined development pipeline and an opportunity to integrate and expand the merged group’s strategic partnerships.”
Novion’s independent non-executive chairman Richard Haddock said the results of the security holder vote were a strong endorsement of the merger.
“This transformational deal is expected to create significant value for our security holders,” he said.
Subject to the New South Wales Supreme Court providing the necessary approvals at a court hearing on Friday, the merger is expected to be implemented on June 11.
Last week the Australian Competition and Consumer Commission said it would not oppose Federation Centres’ proposed acquisition of Novion Property Group after accepting court-enforceable undertakings from the parties to sell one of their shopping centres in Melbourne where the merger was likely to reduce retail competition for consumers.
In WA, Novion owns Rockingham Shopping Centre and Midland Gate Shopping Centre but its Eastern States portfolio includes the world-class asset, Chatswood Chase Sydney.
Federation Centres added Currambine Central to its WA portfolio in December and now owns or partly owns 14 WA shopping centres, including a 50 per cent stake in the Galleria Shopping Centre in Morley.
Together they will own 16 shopping centres—three regional shopping centres, five sub-regional centres and eight neighbourhood centres.
