Germany's biggest residential landlord Vonovia launched its public takeover offer for all shares in rival Deutsche Wohnen on Wednesday, a 136-page document which states that the acceptance period for shareholders ends on 21 July.
Vonovia announced in late May that it had reached agreement with Deutsche Wohnen on a €18 bn merger of the two companies that would create Europe's biggest residential group with a market capitalisation of around €45 bn and a total property value of almost €90 bn.
Vonovia is offering €52.00 in cash and a cash dividend of €1.03 per Deutsche Wohnen share. The offer represents a premium of 15.6% on Deutsche Wohnen's closing share price of €44.99 on 21 May, the last day of trading before the offer was announced on 24 May.
The deal is subject to a minimum acceptance threshold of 50% of the outstanding shares of Deutsche Wohnen.
Vonovia has submitted its takeover bid to Germany’s cartel office for approval, and the deal is expected to be completed by the end of August. Market experts do not foresee antitrust issues as Vonovia only has a 0.9% share of Germany’s residential market, according to credit rating agency Scope.
The majority of Deutsche Wohnen's 150,000 apartments are located in Berlin, while Vonovia's 415,000 properties are spread across Germany, Sweden and Austria.
Deutsche Wohnen said combining the two companies offered the opportunity to address the strategic challenges of the housing market even more consistently.
'Now is the right moment to combine the proven performance and strengths of both companies. Together we are creating new perspectives for our employees, our tenants and our owners,' commented Michael Zahn, CEO of Deutsche Wohnen.
Vonovia said the merger would generate some €105 mln in cost synergies per year by the end of 2024.
The tie-up - Vonovia's third attempt to swallow Deutsche Wohnen - comes at a time of heightened political tension over the residential market in Germany, particularly in Berlin where public anger over rising rents and the lack of affordable housing has mounted in recent years.
In the offer document, the two companies say they 'want to make a sustainable contribution to the long-term stabilization of the housing market in Berlin, and work together to address the major challenges on the Berlin housing market in a further improved and more efficient manner, which also serves the interests of tenants'.
This, they say, involves 'maintaining and modernizing their current housing stock and creating new, affordable housing'.
