Simon Property Group and Brookfield Asset Management have finalized the terms of their acquisition of J.C. Penney.
The companies announced Wednesday that they have entered into an asset purchase agreement, which will bring the struggling department store chain out of bankruptcy.
“Signing a definitive APA with Brookfield, Simon and our Majority First Lien Lenders allows us to move forward towards the completion of our financial restructuring,” Jill Soltau, CEO of J.C. Penney, said in a press release. The retailer expects to emerge from Chapter 11 ahead of this year’s holiday season.
Under the agreement, Brookfield and Simon will effectively acquire all of J.C. Penney’s retail and operating assets. The retailer’s lenders will own its real estate and distribution centers through 160 separate holding companies; and the lenders will enter into master lease agreements with Brookfield and Simon.
It was originally reported in September that Simon and Brookfield would pay about $300 million in cash and assume $500 million in debt to buy J.C. Penney.
The move was somewhat expected as the liquidation would have dealt a significant blow to malls.
The retailer is one of the largest stores to file for bankruptcy protection during the pandemic. J.C. Penney entered proceedings with nearly 850 stores and about 85,000 employees.