Prologis to buy U.K.’s Segro for $18.8B after two-month battle

Prologis ↘ 2.31% announced on Tuesday that it has reached a recommended agreement with the board of Segro to acquire the U.K.'s largest real estate investment trust for approximately £14 billion ($18.8 billion), ending a two-month takeover battle that began in late June.prnewswire+1

Deal Terms

Under the terms of the acquisition, Segro shareholders will receive 0.0920 new Prologis shares for each Segro share, with a partial cash alternative of up to £3.5 billion representing 25% of total consideration at a fixed price of 1,031.7 pence per share. The deal represents a 39% premium to Segro's closing share price before Prologis first disclosed its takeover interest on June 24.marketscreener+3

"This deal brings together SEGRO's exceptional portfolio and customer relationships with Prologis' global platform, operating expertise and financial strength," said Prologis CEO Daniel S. Letter.prnewswire

The Segro board unanimously intends to recommend the transaction, which is expected to close in the first half of 2027. Prologis will apply for a secondary listing on the London Stock Exchange as part of the deal.proactiveinvestors+1

A Prolonged Contest

Prologis, the world's largest industrial real estate owner, first approached Segro with an all-share bid of £12.6 billion on June 16, valuing shares at 925 pence each. Segro rejected that proposal on June 23, calling it inadequate. A second and third offer were also rebuffed in July, with Segro arguing the bids undervalued its European warehouse portfolio and development pipeline.finance.yahoo+3

On July 22, Prologis tabled what it called a "best and final" offer at the improved terms, and Segro extended the UK Takeover Code deadline to August 12 to allow further engagement. According to The Wall Street Journal News Corp ↘ 0.40%, the final agreement was reached over the weekend.wsj+2

Strategic Rationale

The combination will create a European operating portfolio of 368 million square feet, expanding Prologis' European footprint by 47%, while increasing its European land bank by 126%. The combined entity will manage approximately $269 billion in assets globally. Prologis expects the deal to be broadly neutral to minimally dilutive to Core FFO per share in the first full year, assuming annualized run-rate synergies.prnewswire

The transaction does not require approval from Prologis shareholders but remains subject to Segro shareholder approval, court sanction, and regulatory clearances.prnewswire