Shopping centre developer Hammerson has reached an agreement to purchase Intu Properties for £3.4 billion.

Both companies said the deal would create a £21bn pan-European portfolio of retail and leisure destinations, enhancing the enlarged Group's position in its geographic markets and across its retail formats.

In addition, at least £2bn of the property portfolio will be disposed of to strengthen the new Group's balance sheet and provide liquidity to reinvest in higher return opportunities.

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Under the deal, the Group will be led by Chief Executive Officer, David Atkins, and Chief Financial Officer, Timon Drakesmith.

David Tyler, Chairman of Hammerson, said: "This transaction will deliver real value for shareholders. The financial strength of the Enlarged Group and its strong leadership team will make it well-placed to take advantage of higher growth opportunities on a pan-European scale."

John Strachan, Chairman of Intu and proposed Senior Independent Director of the Enlarged Group, said: "A combination of both Intu and Hammerson will create a more resilient, diversified and stronger group that we believe will benefit all our stakeholders.

"Intu offers high-quality retail and leisure destinations in the UK and Spain, which when merged with Hammerson's own top-quality assets in the UK, in France and in Ireland, present a highly attractive proposition for retailers and shoppers in Europe's leading cities."

(LM/MH)