Hudson's Bay Acquires German Retailer in $3.2B Deal
Hudson's Bay has purchased the German retailer Galeria Kaufhof in the first real estate acquisition under its joint venture with Simon Properties. The Canadian department store chain paid C$3.2B for Kaufhof and will sell 40 of its 59 locations in order to finance the transaction. The move is a crucial step in Hudson's drive to build value in advance of an initial public offering. The acquisition should increase its real estate portfolio's value by C$11B. In 2013 Hudson's Bay bought Saks Fifth Avenue through its purchase of Saks Inc. Kaufhof is the top department store in Germany and Belgium and a major boon to Hudson's Bay as it looks to expand in Europe.
Kaufhof is owned by Metro AG, which will use money from the sale to pay down debts. Some retail analysts suspect that Metro could have bargained for a higher purchase price. Hudson's Bay beat out a rival bid from Signa Retail, which owns Karstadt, a big Kaufhof competitor, and whose deal would likely have led to layoffs. [Bloomberg]
