The Lowy family, which owns 9.0 percent of Westfield, said they would rather be investors than executives after putting in a combined 145 years at the company, which has stakes in 18 suburban US shopping centers, three of which it wholly owns.
Westfield, headquartered in Sydney, Australia, owns 35 shopping malls in Los Angeles, San Francisco, New York, London and Milan, including the 1 World Trade Center mall in Lower Manhattan, which opened in August 2016.
Westfield has been viewed as a pioneer in US mall redevelopment, focusing on luxury properties rather than lower-end malls located in less affluent locations where hundreds of stores have been shuttered. The company also is developing malls in Brussels and in Hamburg, Germany.
Unibail-Rodamco owns and operates 69 shopping centers in some of Europe's key cities, including Paris, Madrid, Stockholm, Amsterdam and Munich, Germany.
Mall operators have been involved in a wave of mergers and acquisitions globally as the rise of e-commerce has squeezed traditional retailers. Unibail expects the deal to close in the first half of 2018.
Westfield's share price is down about 10 percent in 2017.
Unibail Rodamco is the largest commercial real estate company in Europe and will own 104 properties across the world when the acquisition is complete, reportedly resulting in cost savings of $100 million a year.
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Shares of such companies have been hit hard and store closures are accelerating, pressuring landlords to fill empty space and reinvent shopping centers.
"The transaction announced today is the culmination of the strategic journey Westfield has been on since its 2014 restructure", Lowy said in a statement.
Westfield chairman Frank Lowy, who launched the company in 1960, said it was with "mixed emotions" that he was announcing the buyout but he was comfortable with the decision, which means he and his two sons Peter and Steven moved from "being executives to being investors".
Lowy, a Holocaust survivor from Czechoslovakia, served as Westfield's chief executive for more than 50 years before becoming non-executive chairman of the board in 2011.
A new advisory board will be chaired by Sir Frank Lowy, providing independent advice to the new company.
One challenge he faced was a shareholder revolt in 2014 over his proposal to demerge Westfield's Australian and New Zealand assets from the US and United Kingdom portfolio, they continue. "I was wondering whether there was some underlying motive here to punish me or bring me down", he told the FT at the time. "They're already 50 percent through that online retail switch", Morningstar analyst Tony Sherlock said of the deal.