Prologis has agreed a deal to buy its industry rival DCT Industrial Trust for $8.4bn in a stock-for-stock transaction.
The boards of directors of both companies have unanimously approved the transaction.
The transaction is anticipated to create substantial synergies, including near-term synergies of approximately $80mn in corporate general and administrative cost savings, operating leverage, interest expense and lease adjustments.
“For some time, we have considered DCT's realigned portfolio to be the most complementary to our own in terms of product quality, market position and growth potential," said Prologis chairman and chief executive officer Hamid R. Moghadam.
“This high level of strategic fit will allow us to capture significant scale economies immediately. In addition, our current platform initiatives, particularly in the areas of advanced analytics, customer experience and procurement and ancillary revenues, will enable us to extract significant upside from the combined portfolios.”
The 7.1 million square foot operating portfolio deepens Prologis' presence in high-growth markets including Southern California, the San Francisco Bay Area, New York/New Jersey, Seattle and South Florida. The acquisition also includes:
The development, redevelopment and value-added projects includes:
“This transaction underscores the exceptional quality of DCT's portfolio, platform and customer relationships, which our talented team has worked hard to create,” said DCT Industrial president and chief executive officer Philip L. Hawkins.
“Our shared commitment to quality, exceeding expectations and enhancing customer experience makes this a perfect combination.”
Under the terms of the agreement, DCT shareholders will receive 1.02 Prologis shares for each DCT share they own. The transaction, which is currently expected to close in the third quarter of 2018, is subject to the approval of DCT stockholders and other customary closing conditions. At closing, it is anticipated that Philip L. Hawkins will join the Prologis board of directors.
J.P. Morgan is acting as exclusive financial advisor and Mayer Brown LLP is serving as legal advisor to Prologis. BofA Merrill Lynch is acting as exclusive financial advisor and Goodwin Procter LLP is serving as legal advisor to DCT.