Kite Realty Group agreed to buy Retail Properties of America in a $2.79 billion all-stock deal that would create one of the biggest US shopping-center owners.

Each common share of Oak Brook, Illinois-based Retail Properties will be converted into 0.623 newly issued shares of Kite stock, according to a statement Monday. That equates to about $12.98 a share, a 13 percent premium to Retail Properties’ closing price on Friday.

The combined firm will own a portfolio of 185 open-air shopping centres with about 32 million square feet (3 million square meters) of leasable space, mostly located in “warmer and cheaper” metropolitan areas in states including Texas and Florida, the firms said in the statement. About 70 percent of the centres include a grocery component. The deal comes three months after grocery-anchored shopping center landlord Kimco Realty Corp. agreed to acquire Weingarten Realty Investors for roughly $3.9 billion.

“This merger further demonstrates our conviction in open-air retail centres as essential shopping destinations and last-mile fulfilment centers,” Kite Chief Executive Officer John Kite said in the statement. The transaction, which needs approval from shareholders of both companies, is expected to close in the fourth quarter.

Shareholders of Indianapolis-based Kite Realty are expected to own about 40 percent of the combined companies’ equity, with Retail Properties investors holding the balance. Kite will assume all of Retail Properties’ debt, and obtained a $1.1 billion bridge loan in case certain debt consents can’t be obtained before the deal is completed.

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