Simon Buys Prime Outlets

Simon Property Group Inc. announced plans to acquire the outlet shopping center business of Prime Outlets Acquisition Co.

Indianapolis-based Simon said it entered into an agreement to buy the 22 outlet centers and assume the company’s existing indebtedness and preferred stock. The transaction was valued at about $2.3 billion.

The Prime Outlets portfolio includes 8.2 million square feet of leasable space at centers throughout the nation and in Puerto Rico, said a news release. The centers were about 92 percent occupied and generated annual sales of about $370 per square foot, the release said.

“Prime Outlets is an excellent opportunity for Simon as it represents a strong strategic fit for our existing Premium Outlet portfolio and enhances our leadership position in the outlet business. Following the completion of this transaction, our outlet portfolio will have 63 centers comprising approximately 25 million square feet,” said Chairman and CEO David Simon, in a written statement.

Simon said the firm will pay equity consideration of about $700 million for the owners’ interests in Prime Outlets, the release said. The firm was advised in this transaction by UBS Investment Bank and JP Morgan Chase & Co., and was represented by Fried, Frank, Harris, Shriver & Jacobson LLP.