This year started with one of the biggest corporate surprises in recent memory – Tesco’s £3.7bn acquisition of wholesale giant Booker.
And, with just weeks left of 2017, a similar feeling of shock reverberated across the industry today. Shopping centre owner Hammerson revealed it has agreed to acquire rival Intu in a deal valuing the latter at £3.4bn.
In a statement to the Stock Exchange this morning, Hammerson said there was “compelling strategic rationale” for the deal, which would bring together the “high-quality retail property portfolios” and the “combined expertise” of the two businesses.
Hammerson added that the enlarged company would be able to better respond to “fast-changing consumer preferences and retail trends” across its £21bn pan-European portfolio.
The amalgamation of Hammerson’s impressive portfolio – spearheaded by Brent Cross, the Bullring, Grand Central Birmingham and Victoria Gate, in Leeds – with Intu centres including Lakeside, Metrocentre and Trafford Centre, would give the business a stake in 12 of the UK’s 20 biggest shopping centres.
Hammerson boss David Atkins, who will head the enlarged business, believes that dominance will leave it “better positioned to serve the needs of our retailers”.
Harper Dennis Hobbs head of Retail Consultancy Jonathan De Mello believes the focus both businesses have placed on technology in recent years should also serve as a positive sign for retailers.
“Hammerson can invest better in their shopping centres’ websites and potentially make them transactional, like Intu has already done”
Hammerson has ploughed cash into a visual search smartphone app for shoppers to use in its malls, while Intu has launched a standalone transactional website pooling together the retailers that trade in its centres, to name just two of their digital initiatives.
“Hammerson can invest better in their shopping centres’ websites and potentially make them transactional like Intu has already done,” De Mello suggests.
“They are platforms that give retailers extra exposure, across channels, which they like, and allows them to trade across multiple channels, both online and in-store, through a partnership with one landlord.”
De Mello says this could have other benefits, such as “de-risking the opening opportunity” for retailers, since it could allow them to see how they trade through one or two stores from a wider selection of centres and through the online platform first, before considering further openings.
Read the full article on Retail Week’s website