Logistics Powerhouses Prologis and Duke Realty to Merge in $26B Deal
San Francisco-based Prologis, Inc. and Indianapolis-based Duke Realty Corporation have entered into a definitive merger agreement by which Prologis will acquire Duke Realty in an all-stock transaction, valued at approximately $26 billion, including the assumption of debt.
“We have admired the disciplined repositioning strategy the Duke Realty team has completed over the last decade,” said Prologis co-founder, CEO and chairman Hamid R. Moghadam. “They have built an exceptional portfolio in the U.S. located in geographies we believe will outperform in the future. That will be fueled by Prologis’ proven track record as a value creator in the logistics space. We have a diverse model that allows us to deliver even more value to customers.”
With the transaction, Prologis said it is gaining high-quality industrial properties for its portfolio in key geographies, including Southern California, New Jersey, South Florida, Chicago, Dallas and Atlanta.
The acquisition on an owned and managed basis comprises:
153 million square feet of operating properties in 19 major U.S. logistics geographies.
11 million square feet of development in progress – about $1.6 billion in total expected investment.
1,228 acres of land owned and under option with a build-out of approximately 21 million square feet.
Prologis plans to hold approximately 94% of the Duke Realty assets and exit one market.
“This transaction is a testament to Duke Realty’s world-class portfolio of industrial properties, long-proven success and sustainable value creation we’ve delivered over the years,” said Duke Realty chairman and CEO Jim Connor. “We have always respected Prologis, and after a deliberate and comprehensive evaluation of the transaction and the improved offer, we are excited to bring together our two complementary businesses.
“This transaction increases the strength, size and diversification of our balance sheet while expanding the opportunity for Prologis to apply innovation to drive long-term growth,” said Tim Arndt, Prologis’ CFO. “In addition to generating significant synergies, the combination of these portfolios will help us deliver more services to our customers and drive incremental long-term earnings growth.”
Goldman Sachs and Citigroup are serving as financial advisors and Wachtell, Lipton, Rosen & Katz is serving as legal advisor to Prologis. Morgan Stanley is serving as the lead financial advisor and Hogan Lovells US LLP is serving as legal advisor to Duke Realty. J.P. Morgan Securities LLC and Alston & Bird LLP are also serving as financial and legal advisors, respectively, to Duke Realty.
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