French property giant Unibail-Rodamco announced Tuesday it will buy Australia's Westfield shopping mall operator in a deal worth US$24.7 billion to create "a global property leader", the two groups said in a statement.
The agreement would "create the world's premier developer and operator of flagship shopping destinations", they said.
Tuesday's announcement comes as mall operators embark on a consolidation drive as they face increasingly tough competition from online shopping sites such as Amazon, which this month launched in Australia.
Westfield's share price is down about 10 percent in 2017.
"The acquisition of Westfield is a natural extension of Unibail-Rodamco's strategy of concentration, differentiation and innovation," said Christophe Cuvillier, chief executive officer of Unibail-Rodamco.
"It adds a number of new attractive retail markets in London and the wealthiest catchment areas in the United States.
"We believe that this transaction represents a compelling opportunity for both companies to realise benefits not available to each company on a standalone basis, and creates a strong and attractive platform for future growth."
The statement said the proposal had been "unanimously recommended by Westfield's board of directors and Unibail-Rodamco's supervisory board".
Unibail-Rodamco is Europe's largest commercial landlord and the purchase comes as it offloads smaller assets in Europe to focus on bigger shopping centres, which are likely to be better suited to fending off the march of e-commerce giants.
Westfield chairman Frank Lowy, who launched the company in 1960, said it was with "mixed emotions" that he was announcing the buyout but he was comfortable with the decision, which means he and his two sons Peter and Steven moved from "being executives to being investors".
"This transaction is in the best interests of shareholders," he told reporters in Sydney via a televised conference from Milan. "That principle has guided my business decision-making since 1960 and it does so again with today's announcement."
Westfield embarked on a restructure in 2014, spinning off its Australia and New Zealand business from its international operations into a separate entity. The company on Tuesday said this had set it up for the Unibail deal.
An emotional Lowy said he and his sons will continue to serve in advisory roles to the new company, while his family will maintain a "substantial investment in the group".
"I'm also proud that Unibail will extend the famous red Westfield brand across all their flagship assets," he added.
Westfield started out with one shopping centre in Sydney's suburbs and now has interests in dozens of shopping malls and airport retail spaces in the United States, Britain and Europe.
"We started small and we took Westfield to the world. It is an achievement that I am increasingly proud."
-- Bloomberg News contributed to this story --