CHICAGO - In an all-cash transaction valued at $3.4 billion, Dutch-based Rodamco North America N.V. (RNA), a regional mall owner, has purchased locally based Urban Shopping Centers Inc., which is both an owner and operator of regional malls. The two companies announced a definitive agreement in September and closed the transaction in November. The deal includes the purchase of $1.6 billion of Urban stock and the assumption of $1.8 billion in debt.

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"This acquisition will transform RNA into a fully integrated, self-managed company," said Gerald E. Egan, CEO of RNA, in a company press release. "Urban's strengths in property management and leasing will enable RNA to replace functions that we previously outsourced to third-party companies. These strengths will give us the capability to reduce costs and maximize the value of our current portfolio."

Urban's property management and leasing capabilities will allow RNA to save about $13.5 million in asset management and other property fees to third parties in fiscal year 2001, according to RNA.

Before the transaction, RNA owned interests in 16 regional malls in 11 states totaling 20 million sq. ft. across the United States. At the end of February 2000, the company's real estate assets were valued at approximately $2.5 billion, according to RNA. With the deal, RNA's portfolio features 36 regional malls in 15 states totaling 40 million sq. ft.

With the purchase, RNA now owns such retail properties as Water Tower Place in Chicago, Copley Place in Boston, Houston Galleria in Houston, San Francisco Shopping Center in San Francisco, Century City Shopping Center in Los Angeles, Perimeter Mall in Atlanta, Florida Mall in Orlando, Fla., and Garden State Plaza in Paramus, N.J.

Egan will continue as the CEO of the new RNA; Matthew S. Dominski, CEO of Urban, and Adam Metz, president of Urban, will be part of RNA's management team. RNA's supervisory and management boards will remain unchanged, and the company's U.S. operations will be headquartered in Chicago.

Urban's employees are expected to remain with RNA. Meanwhile, Urban's original founders, who owned a 35% interest in the company on a fully diluted basis, will have a non-controlling minority interest in the Urban portfolio.