In a transaction that creates the world's largest owner and manager of factory outlet centers, Prime Retail Inc. and Horizon Group Inc. completed their merger on June 15.

The merger, which has an aggregate value of $973 million, calls for Baltimore-based Prime Retail to integrate 22 of Horizon's top-performing outlet centers into its portfolio. Horizon's other 13 centers and Prime Retail's outlets in Daleville, Ind., and Gretna, Neb., are being spun off into a separate public company called Horizon Group Properties.

With Horizon's top outlets in its portfolio, Prime Retail says it is now the largest owner/operator and developer of factory outlet centers in the world with 49 centers comprising 13.7 million sq. ft. in 26 states.

Prime Retail now owns about 25% of all outlet space in the United States and approximately 50% of all outlet space owned by public REITs. Its new market capitalization now tops $2 billion. "The combined portfolio will increase Prime Retail's average occupancy rate and sales per sq. ft., while decreasing our overhead costs," CEO Abraham Rosenthal says. "This transaction also will significantly increase the number of stores in our portfolio operated by premier brands such as Polo, Tommy Hilfiger, Nike, Liz Claiborne and The Gap, giving us a larger number of premier stores than any other company in the outlet industry."