Prologis moves ahead with $18.8 billion Segro takeover
Key Takeaways
- •Prologis will acquire Segro in an $18.8 billion transaction, making it one of the largest real estate acquisitions in recent years.
- •The acquisition will expand Prologis' European portfolio by 47% to 368 million square feet and add a 13 million-square-foot development pipeline on the continent.
- •Prologis announced a public offering of 15 million shares of common stock to raise approximately $2.1 billion in gross proceeds to help finance the deal.
- •Under the agreement terms, Segro shareholders will receive 0.092 new Prologis shares per share held, with the option to receive up to 25% in cash.
- •The combined company would manage $269 billion in assets, and Prologis plans to seek a secondary listing on the London Stock Exchange.
Prologis, the world's largest logistics real estate company, said Tuesday that it will move ahead with its plan to acquire London-based logistics warehouse operator Segro. Last month, Prologis put forward what it described as its “best-and-final” offer after multiple rejections from Segro’s board. The final transaction values Segro at $18.8 billion, making it one of the largest real estate acquisitions in recent years and a landmark cross-border deal in the industrial property sector.
Prologis ( NYSE: PLD ) also announced a public offering of 15 million shares of common stock to help fund the deal. The company expects the offering to raise $2.1 billion in gross proceeds. J.P. Morgan and BofA Securities, the underwriters, have a 30-day option to buy up to an additional 2,250,000 shares.
Shares of PLD fell 2.8% to $140.15 in early Tuesday trading, roughly in line with the $140 offering price.
“We are pleased to have reached agreement with the SEGRO Board on a combination that we believe will create meaningful value,” Prologis CEO Dan Letter said in a news release. “This deal brings together SEGRO’s exceptional portfolio and customer relationships with Prologis’ global platform, operating expertise and financial strength.”
The addition of Segro ( LSE.SGRO ), one of Europe's largest owners and developers of warehousing and industrial property, would expand Prologis’ European portfolio by 47% to 368 million square feet and add a 13 million-square-foot development pipeline on the continent. The acquisition significantly deepens Prologis' presence in European markets where e-commerce penetration and supply-chain reconfiguration have driven sustained demand for modern logistics space.
The combined company would have $269 billion of assets under management.
Under the terms of the agreement, Segro shareholders would receive 0.092 new Prologis shares for each share held, with the option to receive up to 25% in cash.
Prologis said the transaction is expected to be neutral to slightly dilutive to its funds from operations, on both a core and adjusted basis, in the first full year after closing. The deal is expected to close in the first half of 2027.
Prologis also said it will seek a secondary listing on the London Stock Exchange.