Novion and Federation Centres to join forces

Novion and Federation Centres to join forcesNovion Property Group and Federation Centres have announced a merger plan that will, if implemented, create a REIT with more than $22 billion in retail assets under management.In a statement to the ASX the companies said the merger, which is unanimously supported by the boards of both companies, will provide existing security holders with an enhanced investment, including:· Increased portfolio scale and expertise· Material value creation via cost savings and future opportunities· Significant earning and distribution accretion for each group· Improved growth opportunities· Enhanced asset, geographic and tenant diversification· Greater relevance for equity and debt investors.The merged group will have 102 retail assets with over $18.2 billion in annual retail sales, making it the second largest listed manager of Australian retail assets and a top 10 manager of retail assets worldwide.Steven Sewell (pictured) – current CEO of Federation Centres and president of the Shopping Centre Council of Australia – will become CEO of the merged group. “The merger brings together two high quality management teams, creating an industry leading executive team with expert skills in managing the full spectrum of retail assets,” said Sewell. “In addition, the complementary platforms will provide both Novion and Federation security holders with a well-balanced exposure to the major retail categories and across discretionary and non-discretionary spending.”Angus McNaughton (CEO and managing director of Novion) and Michael Gorman (deputy CEO and chief investment office of Novion) will step down from their current roles should the merger be implemented.Upon implementation, slated for June this year, Peter Hay (current Novion independent non-executive director) will be chairman of the merged group, Richard Haddock (current chairman of Novion) will continue as a director and Dr Bob Edgar (current chairman of Federation) will step down from the board. The Gandel Group – which will have a 13.8 per cent direct interest in the merged group and will be the co-owner of the group’s largest asset, Chadstone Shopping Centre – will also retain two board representatives.