Warehouse giant Prologis Inc to acquire Liberty Property Trust for $12.6 billion

The deal has at least $120 million in cost synergy.

In a statement, Warehouse giant Prologis Inc said, it has agreed to acquire Liberty Property Trust, a rival industrial real-estate business , for $12.6 billion. The deal is aimed at improving its U.S. footprint midst an e-commerce 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 acquisition is expected to close in the first quarter of 2020.

Prologis stated, the all-stock deal which includes debt, would deepen its presence in U.S. markets such as New Jersey, Pennsylvania’s Lehigh Valley, Southern California, Houston, and Chicago.

“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,” said Hamid Moghadam,Chief Executive Officer and Chairman of Prologis.

“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,” said Bill Hankowsky, Liberty’s Chairman and Chief Executive Officer.

In a statement Prologis said, it plans on selling around $3.5 billion worth of assets, including $2.8 billion of “non-strategic” logistics properties and $700 million of office properties.

Both companies have said, as a result of the deal they expect savings of around $120 million from administrative costs, operating leverage, lower interest expense and lease adjustments.

Activist investor Jonathan Litt of Land & Buildings Investment Management LLC had pushed Liberty to consider selling itself given, what he considered to be undervalued shares, following the recent purchases of similar real-estate assets by Blackstone Group Inc and Prologis.

In September, Litt had said he knew of an unnamed party willing to shell out $60 a share for Liberty.

Litt did not immediately respond to requests for comments.

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