French commercial real estate giant Unibail-Rodamco has agreed to acquire Westfield Corp. for $15.7 billion in a major consolidation of mall operators that reflects the shift of consumers from physical stores to online shopping.

Westfield has been viewed as a pioneer in U.S. mall redevelopment, focusing on luxury properties rather than lower-end malls located in less affluent locations where hundreds of stores have been shuttered. But its shares had fallen about 9% this year before Tuesday’s merger announcement.

The deal gives Unibail-Rodamco, which operates 69 shopping centers in major European cities, a significant foothold in the U.S. It is paying $7.55 a share for Westfield, a premium of 17.8% to the closing price Monday.

“The acquisition of Westfield is a natural extension of Unibail-Rodamco’s strategy of concentration, differentiation and innovation,” Unibail CEO Christophe Cuvillier said in a news release. “It adds a number of new attractive retail markets in London and the wealthiest catchment areas in the United States.”

Westfield owns and operates 35 shopping centers in the U.S. and U.K., including flagship malls in London and Century City in Los Angeles. The company was built by Frank Lowy, an Australian billionaire who started with one shopping center outside of Sydney in 1959.

The sale of Westfield follows retail real estate investment trust GGP Inc.’s rejection of a $14.8 billion offer from Brookfield Property for the two-thirds it did not already own.

“The industry is under severe pressure from internet selling and particularly Amazon,” John Colley, a professor at Britain’s Warwick Business School, told the Los Angeles Times. “Clearly there are significant savings as the new [Unibail/Westfield] enterprise will need only one head office, board, systems and functional management.”

The New York Times said the merger indicates “there may still be life after all in the American mall — especially the luxury version.” But shopping center magnate Rick Caruso, who operates outdoor retail centers, believes indoor malls are often too formulaic and losing their appeal.

“The indoor mall is dying,” he said. “It’s antiseptic and cold. Smarter stores will no longer be in indoor malls.”

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