NEW YORK (CNN/Money) -
General Growth Properties, Inc., the nation's No. 2 shopping mall operator, announced a deal Friday to buy competitor Rouse Co. for $7.2 billion in cash.
General Growth (GGP: Research, Estimates) will pay $67.50 a share for Rouse (RSE: Research, Estimates), a premium of 33.4 percent over Thursday's closing price. It will also assume $5.4 billion in debt as part of the deal.
Rouse shares rose to $67.01, up $16.40, or 32 percent, in pre-market trading on Inet after the deal was announced Friday.
Rouse owns or has ownership interests in 37 regional malls, four community centers and six mixed-use projects, totaling approximately 40 million square feet. It has some high-profile malls, including Water Tower Place in Chicago, Oak Brook Center in Oak Brook, Ill., Fashion Show Mall in Las Vegas, Harborplace and The Gallery in Baltimore, South Street Seaport in New York, Park Meadows Mall in Denver and Faneuil Hall Marketplace in Boston.
In addition to malls, Rouse owns office, research and development and industrial space and is the developer of the master-planned communities. Ariel Capital Management owns about 10 percent of the company.
Chicago-based General Growth has used acquisitions as a method of expansion in the past. The owner or operator of 177 U.S. malls, the company bought JP Realty in 2002, which had 18 regional malls.
It also has bought individual malls, announcing a deal last week for Stonestown Galleria, one of the premier malls in the San Francisco Bay Area, for $312 million. It also is expanding overseas, announcing investments earlier this month in two separate joint ventures in Brazil and Costa Rica.
Shares of General Growth, second only to Simon Property Group among mall operators, closed Thursday down 51 cents to $31.54.
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