(Reuters) - Warehouse giant Prologis Inc (PLD.N) said on Sunday it had agreed to acquire rival industrial real-estate business Liberty Property Trust LPT.N in a $12.6 billion deal to improve its U.S. presence amid the ecommerce boom.
If approved, Prologis said Liberty shareholders would receive 0.675 times a Prologis share for each unit they hold, about $61 a share. The deal is expected to close in the first quarter of 2020.
Prologis, which has a global footprint, said the all-stock deal including the assumption of debt would deepen its presence in U.S. markets such as Pennsylvania’s Lehigh Valley, Chicago, Houston, New Jersey and Southern California.
“Liberty’s logistics assets are highly complementary to our U.S. portfolio and this acquisition increases our holdings and growth potential in several key markets,” Prologis Chairman and Chief Executive Officer Hamid Moghadam said.
“The joining of these two platforms at this moment, when industrial logistics has become so pivotal to the new economy, will further the industry’s ability to support the nation’s supply chain,” Liberty Chairman and Chief Executive Officer Bill Hankowsky said.
Prologis plans to sell about $3.5 billion worth of assets, including $2.8 billion of “non-strategic” logistics properties and $700 million of office properties, the announcement said.
The transaction is anticipated to immediately save around $120 million from administrative costs, operating leverage, lower interest expense and lease adjustments, the companies said.
Activist investor Jonathan Litt of Land & Buildings Investment Management LLC had pushed Wayne, Pennsylvania-based Liberty to consider selling itself given what he considered to be undervalued shares and recent purchases of similar real-estate assets by Blackstone Group Inc (BX.N) and Prologis.
Litt said in September he knew of an unnamed party willing to pay $60 a share for Liberty.
Litt did not immediately respond to an email seeking comment Sunday night.
Reporting by Ismail Shakil in Bengaluru and Lawrence Delevingne in New York; Editing by Peter Cooney and Stephen Coates