Prologis Inc (NYSE: PLD) are set to buy rival Liberty Properties (NYSE: LPT) in reported a $12.6 billion deal.
This deal will allow Prologis to expand its American presence whilst removing a big competitor in the real-estate business sector.
When the deal finalizes, shareholders of Liberty Properties will receive 0.675 times a Prologis share for each unit they hold, equating to $61 per share.
The deal is expected to be completed in the first quarter of 2020.
Prologis, who have a global reputation in this sector said the all stock deal inclusive of debt would allow expansion into U.S. markets such as Pennsylvania’s Lehigh Valley, Chicago, Houston, New Jersey and Southern California.
“Liberty’s logistics assets are highly complementary to our U.S. portfolio and this acquisition increases our holdings and growth potential in several key markets,” Prologis Chairman and Chief Executive Officer Hamid Moghadam said.
“The joining of these two platforms at this moment, when industrial logistics has become so pivotal to the new economy, will further the industry’s ability to support the nation’s supply chain,” Liberty Chairman and Chief Executive Officer Bill Hankowsky said.
Prologis have plans to sell $3.5 billion worth of assets, including $2.8 billion of “non-strategic” logistics properties and $700 million of office properties, the announcement explained.
This acquisition is expected to save around around $120 million from administrative costs, operating leverage, lower interest expense and lease adjustments, the companies said.
“Liberty’s high-quality logistics real estate will strengthen our portfolio as well as our customer roster,” said Prologis chief investment officer Eugene F. Reilly. “We are also excited about the caliber of talent at Liberty and expect a number of their employees to join us to help manage the portfolio and execute on capital deployment.”
Prologis already boast customers such as Amazon (NASDAQ: AMZN), Walmart (NYSE: WMT) and FedEx Corp (NYSE: FDX) and this will expand their American business further.
Currently, shares of Prologis are trading at 86.60 USD per share, whilst shares of Liberty trade at 58.31 USD. 28/10/19 15:35BST.
In the real estate sector, investors have switched to fixed rate loans. Additionally, Rightmove have said that the Autumn bounce has been snuffed by Brexit and Hunters Property are optimistic about their full year outlook.
