Simon buys San Marcos outlet mall

Simon Property Group Inc., the preeminent mall operator in the Rio Grande Valley, said Tuesday it will buy the outlet shopping centers owned by Prime Outlets Acquisition Co., including one of the two outlet malls in San Marcos.

Simon, which already owns McAllen’s La Plaza Mall and the area around the McAllen Convention Center, Mercedes’ Rio Grande Valley Premium Outlets, Harlingen’s Valle Vista Mall and the Round Rock Premium Outlets near Austin, will have control of some of the top retail destinations in Texas for lucrative shoppers from Mexico once the deal is completed.

The deal, which is valued at $2.3 billion, will solidify Simon’s position as the nation’s largest public real estate company with 63 outlet centers with about 25 million square feet.

The Indianapolis-based Simon, which also owns regional malls and other assets, had 387 properties at the end of the third quarter across the U.S. and in Europe and China.

Under the terms of the agreement, Simon will pay about $700 million for the owners’ interests in Prime Outlets, comprising 80 percent of existing cash on hand and 20 percent in Simon common operating partnership units. The price will be based on a 10-day trading average of Simon common stock shortly before closing.

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Monitor reporter Sean Gaffney contributed to this report.