BLOOMFIELD HILLS, MICH. — Taubman Centers, Inc. (NYSE: TCO) and TCBL Consulting Limited, a Beijing-based retail real estate consultancy, have entered into a definitive agreement through which Taubman Asia is acquiring a 90 percent controlling interest in TCBL. The new company, Taubman TCBL, will combine the local insights and network of TCBL with the global industry expertise and reputation of Taubman Centers.
The total consideration for the transaction is $24 million, subject to final closing adjustments. Taubman Asia will pay approximately $12 million in cash for its controlling interest in TCBL and will credit the noncontrolling owners with approximately $12 million of capital in the newly formed company. Taubman Asia will fund any additional capital required by the business and will receive a preferred return on any capital contributed. The ownership agreements provide for the distribution of preferred returns on capital as well as returns of all such capital prior to the sharing of profits on relative ownership interests. The transaction has been approved by the board of directors of each company and is expected to close by October 2011, subject to government approval and necessary registration.
“China is fast developing into one of the world’s leading consumer markets, with exciting and diverse retail opportunities,” said Rene Tremblay, president of Taubman Asia. “Our investment in TCBL is a unique opportunity for Taubman to accelerate investment in the Chinese market, creating further value for our retailers and investors.
Upon closing of the deal in Fall 2011, Taubman TCBL will be established as a subsidiary of Taubman Asia, focusing on the China market. Taubman TCBL will be headquartered in Beijing with over 200 staff in its seven offices in China, including Beijing, as well as Chengdu, Chongqing, Guangzhou, Shanghai, Shenzhen, and Shenyang. Tremblay will be the chairman of Taubman TCBL, while Thomas Tam, formerly TCBL’s joint management director, will be appointed president and CEO of Taubman TCBL. Lawrence Wu, formerly TCBL’s joint management director, will join the board of Taubman TCBL.
Tam (left) and Tremblay
The new subsidiary will provide retail analysis, leasing, property management, investment services, development, design and planning as well as excellent relationships with international retailers. Taubman TCBL will serve as a platform through which Taubman’s future investments in mainland China will be made, giving Taubman Asia a 90 percent ownership interest in these investments.
“Taubman’s 61-year heritage and track record in developing and managing high-quality shopping centers, along with TCBL’s in-depth knowledge and understanding of the Chinese market, position Taubman TCBL as the preferred partner of choice in retail property development in mainland China. We are optimistic that we will have an announcement in China in the next 12 months,” added Tremblay.
— Dan Marcec