General Growth Properties to Buy Rouse Company for 6.52 Times Revenue

Weekly Corporate Growth Report, Aug 30, 2004

The Deal: General Growth Properties Inc. has agreed to purchase The Rouse Company for $7.2 billion. Under the terms of the deal, General Growth will pay $67.50 in cash per share for Rouse. General Growth will also assume $5.4 billion in Rouse debt, bringing the total deal value to $12.6 billion. The transaction is expected to close in the fourth quarter of 2004.

Discussion: The Rouse Company is a real estate investment trust that owns and operates shopping centers, office space, and and industrial properties. The company specializes in upscale shopping areas. The company's properties include such landmark facilities as Boston's Faneuil Hall Marketplace, Baltimore's The Gallery at Harborplace, Chicago's Water Tower Place, and New York's South Street Seaport.

General Growth Properties is is the second-largest owner/operator of malls in the United States. The real estate investment trust owns or operates more than 150 shopping malls all over the country.

The acquisition will add 37 regional malls to General Growth's current 141. The deal will also add four community centers and six mixed-use projects to General Growth's portfolio of retail operations. The deal, when completed, will create the largest US mall company based on number of regional malls owned.