German residential property company Deutsche Wohnen reached agreement this week on its merger with Berlin-based Gehag Group. The merger will involve In Deutsche Wohnen taking over an 85% interest in Gehag from two Luxembourg investment companies backed by US private equity company Oaktree Capital Management. Deutsche Wohnen have also announced that it intends to take over the remaining shares from HSH Real Estate, representing almost 15%, noting that the Federal State of Berlin owns a share of ‘considerably less than 1% in GEHAG.
German residential property company Deutsche Wohnen reached agreement this week on its merger with Berlin-based Gehag Group. The merger will involve In Deutsche Wohnen taking over an 85% interest in Gehag from two Luxembourg investment companies backed by US private equity company Oaktree Capital Management. Deutsche Wohnen have also announced that it intends to take over the remaining shares from HSH Real Estate, representing almost 15%, noting that the Federal State of Berlin owns a share of ‘considerably less than 1% in GEHAG.
Pending regulatory approval, the deal values GEHAG at EUR 1.84 bn, and will more than double the number of residential units that Deutsche Wohnen manages. The agreement involves Deutsche Wohnen paying the two Luxembourg companies EUR 257 mln in cash, together with 6.4 mln new Deutsche Wohnen shares and a convertible bond with an overall nominal value of EUR 25 mln.
‘This merger establishes a consolidation platform with significant potential for synergies, and therefore for strategic growth,’ said Deutsche Wohnen ceo Andreas Lehner. ‘In view of the positive economic development in Germany and the resulting improvement in the market potential in the housing market, this merger will form the starting point for further expansion of our portfolio.’