Two May Become One: Further Consolidation in the Shopping Mall Industry?
The already highly consolidated U.S. shopping mall industry may be on the verge of further consolidation. In recent weeks, a minority shareholder of General Growth Properties, Inc., the second largest owner of regional shopping malls in the U.S., has actively courted potential suitors to acquire General Growth’s portfolio of 149 regional shopping malls. One of the minority shareholder’s targeted suitors is the largest owner of regional shopping malls in the U.S., Simon Property Group, Inc. This is not the first time Simon’s and General Growth’s names have been linked; Simon made an unsuccessful bid in 2010 to take over General Growth when General Growth was emerging from bankruptcy.
If the marriage between Simon and General Growth were to succeed this time around, Simon would own as many as one-third of the shopping malls in the U.S. and strengthen its already strong position in the industry. And if history is any indication, that fact is unlikely to be overlooked by federal and state antitrust regulators who may scrutinize the transaction. While the courtship between General Growth and Simon is in its early stages and General Growth’s Board of Directors has issued a public statement that the company intends to remain independent, this courtship should continue to be followed closely by the shopping mall industry because it has the potential to be a real game changer.