Investors bid up shares in Simon Property Group Inc. on Tuesday morning after the mall owner announced plans to double down on outlet malls by purchasing its own outlet division’s largest rival, Prime Outlets Acquisition Co.

Adding the 22-mall portfolio of Baltimore-based Prime Outlets to Chelsea Premium Outlets will give Simon a total of 63 outlet malls with more than 25 million square feet of space. Simon’s Chelsea already is the world’s largest owner and developer of upscale outlet centers.

Indianapolis-based Simon values the deal at about $2.3 billion including the assumption of debt. It will pay about $700 million for Prime Outlets in the form of cash and partnership units.

If the deal closes, it would be the largest involving an Indianapolis-based company since Eli Lilly and Co. purchased ImClone Systems Inc. in November 2008 for $6.3 billion.

Wall Street appeared to like the Simon deal, as the company’s shares rose by about $1 each, to $75 in early trading Tuesday.

Simon made its first foray into the outlet mall business with its 2004 acquisition of Chelsea Property Group Inc., a deal valued at $3.5 billion.

The move comes as Simon maneuvers to take over its nearest mall rival, Chicago-based General Growth Properties Inc., which is going through bankruptcy reorganization. Simon has been buying the company's debt in anticipation for an eventual bid.

“It’s a good deal,” Alexander Goldfarb, an analyst at Sandler O’Neill & Partners LP, told Bloomberg News. “Simon’s done a good job with Chelsea, and this makes sense. It just fits well within the outlet portfolio.”

Analysts have expected Simon, the largest U.S. mall owner, to go shopping this year. The company has conserved cash by paying most of its dividend in stock, and has generated more capital by selling stock and debt at a time many real estate companies are begging for money. The result: Simon now has $6 billion in “dry powder” it can use for acquisitions, according to a report by J.P. Morgan.

The Prime Outlets portfolio includes properties in Ohio, Illinois and Michigan, but none in Indiana. The largest concentration of properties is in Florida, with a total of six outlets in cities including Orlando and Naples. As of June 30, the properties were 92-percent occupied and generated $370 in sales per square foot.

“Prime Outlets is an excellent opportunity for Simon as it represents a strong strategic fit for our existing Premium Outlet portfolio and enhances our leadership position in the outlet business,” Simon CEO  David Simon said in a statement.

Simon’s existing Chelsea Premium Outlets portfolio includes 12 outlets on the West Coast, while the Prime Outlets portfolio includes only two. Chelsea has two centers in Indiana, in Edinburgh and Michigan City.

Simon has completed $25 billion in mergers and acquisitions since the company went public in 1993, Simon said in a Sept. 15 interview with Bloomberg Television.