Listed German residential property investor Vonovia is proposing to buy its rival Deutsche Wohnen for €18bn.
Vonovia has agreed to offer Deutsche Wohnen shareholders €53.03m for each share held, a price which represents an 18% premium to the latter’s stock closing price on Friday.
Deutsche Wohnen, which has a €30bn gross asset value, owns 155,000 residential units and a nursing homes portfolio in Germany worth €1.2bn. Vonovia, which holds assets in Germany as well as Austria and Sweden, has a €28.7bn market capitalisation, 415,000 residential units and a gross asset value of €59bn.
Vonovia said it intends to finance the deal with a €22bn acquisition finance, adding that it also plans to raise up to €8bn by issuing new shares in the second half of this year once the acquisition completes at the end of August.
The deal is subject to a number of conditions including competition clearance and approval from at least 50% of Deutsche Wohnen shareholders.
As part of the merger proposal, Vonovia and Deutsche Wohnen are offering the State of Berlin to acquire a number of residential units from the stock of the two companies.
Once completed, Michael Zahn the CEO of Deutsche Wohnen and Philip Grosse the CFO of Deutsche Wohnen will be appointed to the management board of Vonovia.
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