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Kimco Realty And Weingarten To Merge, Creating $20.5B Retail Landlord Juggernaut

Kimco Realty CEO Conor Flynn

Kimco Realty Corp. and Houston-based Weingarten Realty Investors have announced plans to merge into a single retail-focused real estate firm, with Kimco continuing as the surviving public company.

The cash and stock deal values Weingarten at about $3.9B, according to MarketWatch. The combined company is expected to have an equity market capitalization of about $12B, and a total enterprise value of $20.5B.

The combined portfolio will include 559 open-air, grocery-anchored shopping centers and mixed-use assets, comprising about 100M SF of gross leasable area, according to a press release.

Weingarten will bring a collection of 159 open-air, grocery-anchored shopping centers and mixed-use properties to the merger, expanding Kimco’s presence in Sun Belt markets like Houston, Miami, Phoenix, Atlanta and Orlando.

Kimco Realty Corp. CEO Conor Flynn told Bisnow that the transaction reflected the firm's confidence in last-mile, open-air, grocery-anchored centers, which have performed well throughout the coronavirus pandemic and which he said can serve hybrid roles as shopping destinations and omnichannel fulfillment centers.

“When you look at the situation that we are in right now with the pent-up demand, we believe we’re in the early innings of the recovery and reopening trade,” Flynn said. “We are experiencing robust and record-setting leasing demand in our portfolio, which has a lot of similar markets to Weingarten, which is one of the reasons why we felt the time was right to execute on this opportunity.”

Reflecting the impact of the pandemic, Weingarten reported a net income of $112.2M in 2020, down from $315.4M in 2019, according to the firm's Q4 2020 earnings report.

The transaction is anticipated to close during the second half of 2021, subject to closing conditions, including the approval of Kimco and Weingarten shareholders. Once the merger is complete, the company’s headquarters will remain in Jericho, New York.

Kimco shareholders are expected to own about 71% of the combined company’s equity, while Weingarten shareholders will own about 29%.

The combined company will be led by Kimco’s management team: Flynn, President and Chief Investment Officer Ross Cooper, Chief Operating Officer David Jamieson and Chief Financial Officer Glenn Cohen. In addition, Kimco’s board of directors will be expanded to nine directors, with one member of the existing board of trust managers of Weingarten to be appointed to the Kimco board.

Milton Cooper will continue to serve as executive chairman of the board of directors of the combined company, and Mary Hogan Preusse will continue to serve as lead independent director for the combined company.

Barclays and Lazard are acting as financial advisers, and Wachtell, Lipton, Rosen & Katz is acting as legal adviser to Kimco. J.P. Morgan is acting as exclusive financial adviser, and Dentons is acting as legal adviser to Weingarten.

UPDATE, APRIL 15, 1:10 P.M. CT: This story has been updated with comments from Kimco Realty Corp. CEO Conor Flynn and Weingarten Realty Investor's Q4 2020 earnings.