Kimco Realty and Weingarten Realty Announce Strategic Merger

Rhea-AI Summary

Kimco Realty Corp. (NYSE: KIM) has announced a definitive merger agreement with Weingarten Realty Investors (NYSE: WRI). This merger aims to create a prominent retail real estate platform with a pro forma equity market capitalization of about $12 billion and total enterprise value of $20.5 billion. Each Weingarten share will convert to 1.408 Kimco shares plus $2.89 in cash, totaling approximately $30.32 per share. The combined entity will manage 559 grocery-anchored centers across the U.S., enhancing scale and growth potential. The transaction is set to close in the second half of 2021, pending shareholder approval.

Positive

• Creation of a combined portfolio of 559 open-air grocery-anchored centers, boosting scale in key markets.
• Pro forma total enterprise value of approximately $20.5 billion, enhancing financial stability.
• Expected 71% ownership by Kimco shareholders post-merger, reinforcing shareholder value.
• Increased asset quality and tenant diversity, positioning the company for sustained growth.

Negative

• None.

Kimco Realty Corp. (NYSE: KIM), one of North America’s largest publicly traded owners and operators of open-air, grocery-anchored shopping centers and mixed-use assets, and Weingarten Realty Investors (NYSE: WRI), a grocery-anchored Sun Belt shopping center owner, manager and developer, today announced that they have entered into a definitive merger agreement under which Weingarten will merge with and into Kimco, with Kimco continuing as the surviving public company. The transaction brings together two industry-leading retail real estate platforms with highly complementary portfolios, creating the preeminent open-air shopping center and mixed-use real estate owner in the country. The increased scale in targeted growth markets, coupled with a broader pipeline of redevelopment opportunities, positions the company to create significant value for its shareholders. The combined company is expected to have a pro forma equity market capitalization of approximately $12.0 billion and a pro forma total enterprise value of approximately $20.5 billion.

Under the terms of the merger agreement, each Weingarten common share will be converted into 1.408 newly issued shares of Kimco common stock plus $2.89 in cash. Based on the closing stock price for Kimco on April 14, 2021, this represents a total consideration of approximately $30.32 per Weingarten share. On a pro forma basis, following the closing of the transaction, Kimco shareholders are expected to own approximately 71% of the combined company’s equity, and Weingarten shareholders are expected to own approximately 29%. The parties currently expect the transaction to close during the second half of 2021, subject to customary closing conditions, including the approval of both Kimco and Weingarten shareholders. This strategic transaction was unanimously approved by the Board of Directors of Kimco and the Board of Trust Managers of Weingarten.

The merger will create a national operating portfolio of 559 open-air grocery-anchored shopping centers and mixed-use assets comprising approximately 100 million square feet of gross leasable area. These properties are primarily concentrated in the top major metropolitan markets in the United States. The combined company is expected to benefit from increased scale and density in key Sun Belt markets, enhanced asset quality, tenant diversity, a larger redevelopment pipeline and a deleveraged balance sheet. As a result, the combined company should be uniquely positioned to drive further sustained growth in net operating income (NOI) and asset value creation through continued strategic leasing and asset management.

“This business combination is highly strategic, creating a stronger platform that is even more capable of delivering long-term growth and value creation,” said Conor Flynn, Kimco’s Chief Executive Officer. “Not only will the merged company and its shareholders enjoy a larger, higher quality, more diversified portfolio with significant embedded growth opportunities, the transaction also reduces the combined company’s leverage, creating a stronger financial profile. This combination reflects our conviction in the grocery-anchored shopping center category, which has performed well throughout the pandemic and provides last mile locations that are more valuable than ever due to their hybrid role as both shopping destinations and omnichannel fulfillment epicenters. It also gives us even greater density in the Sun Belt markets we are targeting as well as visibility into the trends shaping necessity-based retail.”

Andrew “Drew” Alexander, Chairman, President and Chief Executive Officer of Weingarten, stated, “Combining these highly complementary platforms is a win-win for shareholders of both companies. After examining the deal from every angle, it became increasingly clear that the potential of the integrated business is much greater than the sum of its parts. The combined company’s increased size and scale, together with its financial strength, should drive an advantageous cost of capital, allowing the combined company to more readily pursue value creation opportunities. We are excited to deliver this transaction to our shareholders, who will realize compelling and immediate value while also benefiting from the upside potential associated with owning the industry’s preeminent open-air shopping center and mixed-use REIT.”

Summary of Strategic Benefits

The merger of Kimco and Weingarten is expected to create a number of operat

FAQ

What are the terms of the Kimco and Weingarten merger?

Weingarten shareholders will receive 1.408 Kimco shares and $2.89 in cash for each share.

When is the Kimco and Weingarten merger expected to close?

The merger is expected to close in the second half of 2021, pending shareholder approval.

What is the market capitalization of the combined company after the merger?

The combined company's pro forma equity market capitalization is approximately $12 billion.

How will the merger affect shareholders of Kimco and Weingarten?

Kimco shareholders will own approximately 71% of the merged entity, while Weingarten shareholders will own about 29%.

What strategic benefits are anticipated from the merger of Kimco and Weingarten?

The merger is expected to create scale, enhance asset quality, and improve tenant diversity, driving revenue growth.