The Taubman family will retain a 20 percent stake, and Taubman’s existing leadership team will continue to run the company under the leadership of Chairman, President and CEO Robert S. Taubman.

Simon placed a 6.2 percent cap rate on the deal. The transaction price of $52.50 per share represents a 51 percent premium to Taubman’s Feb. 7, 2020, closing price and a 19 percent premium to total enterprise value, which includes debt and preferred equity.

"This transaction will be immediately accretive to Simon's FFO,” said David Simon, chairman, president and CEO of Simon. “By joining together, we will enhance the ability of Taubman to invest in innovative retail environments that create exciting shopping and entertainment experiences for consumers, immersive opportunities for retailers and substantial new job prospects for local communities."

The Taubman portfolio includes Great Lakes Crossing Outlets (nearly 1.4 million square feet of gross leasable area), in Auburn Hills, Mich.

Simon has aimed to acquire Taubman for some time. In 2003 Simon and partner Westfield ended a years-long hostile-takeover attempt of Taubman after Michigan changed its takeover laws to enable the Taubman family to block the deal.

Sixteen years later the Taubman family is more amenable to merging. “Over the past few years, David and I have developed an excellent personal relationship, and importantly, Simon shares our commitment to serving retailers, shoppers and the communities in which we operate,” Robert Taubman said.

The deal gives Simon — which owns some 120 million square feet, according to its website — control of Taubman’s portfolio of 24 centers, totaling some 25 million square feet in the U.S. and Asia. The industry’s other giant, Brookfield Properties, owns roughly 146 million square feet of retail, according to its website.

Taubman is known for high-end, high-productivity malls, including Beverly Center, in Los Angeles, and Country Club Plaza, in Kansas City. Taubman’s same-center net operating income grew by 3.9 percent in 2019, thanks in part to tenant sales per square foot that climbed by nearly 10 percent, to $972. Taubman’s average rent per square foot climbed by 1.6 percent in 2019.

By comparison, Simon’s same-center NOI increased by 1.7 percent, and tenant sales per square foot by 4.8 percent, to $693.

The transaction, subject to customary closing conditions, is expected to close sometime in midyear. Taubman Centers will have a 45-day "go shop" period to look for competing bids. Under the merger agreement, Taubman would pay a $46.6 million termination fee if it terminates the agreement within those 45 days. If Taubman terminates after that period, the fee jumps to $111.9 million.

Retraction: SCT updated this story Feb. 14, at 11 a.m. Eastern. A previous version of this story incorrectly labeled Taubman Centers as a rival of Simon.