Choice Properties Real Estate Investment Trust (Choice Properties), the real estate arm of Loblaw, is acquiring Canadian Real Estate Investment Trust (CREIT) for $3.9 billion in cash and stock.

The deal will form Canada’s largest REIT, with an enterprise value of approximately $16 billion, 752 properties and 69 million square feet of gross leasable area. Choice Properties will acquire all of CREIT’s assets and assume all of its liabilities, and will pay about 42 per cent of the purchase price in cash—to a maximum of $1.65 billion—and 58 per cent in Choice Properties units.

“Choice Properties’ expanded diversified real estate portfolio, anchored by Canada’s largest retailer, will provide unitholders of both Choice Properties and CREIT the opportunity to capitalize on the future growth and value creation opportunities of this strategic transaction,” said John Morrison, president and CEO of Choice Properties. “Relying on the depth of tenant relationships of both organizations, the combined real estate will provide tenants with best-in-class real estate solutions across an extensive national portfolio.”

This expanded pipeline includes potential to capitalize on an established retail development and intensification program and to leverage joint venture partnerships to access attractive sites to fuel additional development. The combined REIT will have 60 sites prime for creating exciting residential-focused mixed-use communities, many of which are in close proximity to public transportation.

“This transformational combination creates immediate value for CREIT and provides tremendous opportunity for Choice Properties to capitalize on Canada’s leading development pipeline and create long term value,” added Stephen Johnson, CEO of CREIT. “Together, the combined REIT is uniquely positioned to deliver results for unitholders as the owner, manager and developer of a high quality portfolio of diversified assets.”