A SHOPPING centre operator running well-known North-East malls is being taken over in a £3.4bn deal.

Hammerson has reached an all share agreement for Intu Properties, which runs Gateshead’s MetroCentre and Newcastle’s Eldon Square.

Bosses say the agreement will create Britain's largest property company, with Intu precincts joining Hammerson-controlled sites, such as Birmingham’s Bullring, in a £21bn operation.

The groups plan to slash costs, offload at least £2bn worth of assets and target high growth markets such as Spain and Ireland.

Shareholders will vote on the deal next year, with Intu having already secured 50 per cent of investor support for the all-paper deal.

Hammerson shareholders will own 55 per cent of the combined firm, with Intu investors holding the remainder.

John Strachan, Intu chairman, said: “A combination of Intu and Hammerson will create a more resilient, diversified and stronger group that we believe will benefit all our stakeholders.

“Intu offers high-quality retail and leisure destinations in the UK and Spain.

“When merged with Hammerson's top-quality assets in the UK, in France and in Ireland, it presents a highly attractive proposition for retailers and shoppers.”

Hammerson boss David Atkins will lead the combined group.

Last month, Intu dubbed itself the “first port of call” for expanding retailers after enjoying a strong trading period during a difficult economic climate.

Officials also praised their international reach, revealing Polish cosmetics retailer Inglot chose its Eldon Square precinct to open its first stand-alone store outside London.

Intu previously pledged to spend around £26m on the MetroCentre to deliver general refurbishment and unit re-sizing work.

It has already invested in new restaurants and agreed a deal with Next to increase its presence at the mall.