Key Takeaways
- • Prologis (NYSE: PLD) has agreed on the terms of a recommended acquisition of SEGRO plc (LSE: SGRO) with the SEGRO board, valuing SEGRO's entire issued and to-be-issued ordinary share capital at approximately $18.8 billion.
- • SEGRO shareholders will receive 0.0920 new Prologis shares per SEGRO share, with an optional partial cash alternative capped at approximately £3.5 billion at a fixed price of 1,031.7 pence per share (basic entitlement: 258 pence cash plus 0.0690 Prologis shares).
- • The combination would create a European operating portfolio of 368 million square feet, expanding Prologis' European footprint by 47%, and a combined European development pipeline of 13 million square feet.
- • Prologis expects the deal to be broadly neutral to minimally dilutive to Core FFO and AFFO per share in the first full year after completion, assuming run-rate synergies, and to maintain A2/A credit ratings from Moody's and S&P.
- • The transaction is expected to close in the first half of 2027, subject to SEGRO shareholder and court approvals, regulatory clearances, and a London Stock Exchange secondary listing for Prologis shares; Prologis shareholder approval is not required.
Summary
Prolgis, Inc. announced that it has reached agreement with the board of SEGRO plc on the terms of a recommended acquisition of SEGRO, valuing SEGRO's entire issued and to-be-issued ordinary share capital at approximately $18.8 billion, according to a PR Newswire release. Prologis chief executive Daniel S. Letter said the combination would bring together SEGRO's portfolio and customer relationships with Prologis' global platform, operating expertise and financial strength, and described the deal as one that the company believes will create meaningful value.
The combination would join two portfolios within a global platform with approximately $269 billion of assets under management. Prologis said the combined European operating portfolio would total 368 million square feet, a 47% expansion of its European footprint, while its European land bank would rise by 126%. The companies also cited a combined European development pipeline of 13 million square feet and expanded long-term growth opportunities across logistics, energy and digital infrastructure.
Under the terms, SEGRO shareholders will receive 0.0920 new Prologis shares for each SEGRO share. Shareholders may elect a partial cash alternative, subject to a maximum aggregate cash amount of approximately £3.5 billion. Each shareholder's basic entitlement equals 25% of the fixed price of 1,031.7 pence per share, which would equate to 258 pence in cash and 0.0690 Prologis shares per SEGRO share. Elections above basic entitlement will be scaled back pro rata if cash demand exceeds the cap. SEGRO shareholders will also keep any 2026 interim dividend of up to 10.14 pence and any 2026 final dividend of up to 22.56 pence per share, which SEGRO intends to pay before closing. The cash component will be funded through a committed term loan facility, existing liquidity and other available sources.
Prologis expects the combination to enhance long-term earnings and return potential. In the first full year after completion, assuming annualized run-rate synergies, it anticipates a broadly neutral to minimally dilutive effect on Core FFO and AFFO per share, and it expects to maintain A2/A ratings from Moody's and S&P. The SEGRO board unanimously intends to recommend the transaction. Completion is expected in the first half of 2027, subject to SEGRO shareholder approval, court sanction of the scheme, applicable regulatory approvals and customary closing conditions. Prologis shareholder approval is not required, and Prologis will apply for a secondary listing of its shares on the London Stock Exchange, a condition to completion. Further details are set out in the Rule 2.7 announcement on the transaction microsite.
The combination would join two portfolios within a global platform with approximately $269 billion of assets under management. Prologis said the combined European operating portfolio would total 368 million square feet, a 47% expansion of its European footprint, while its European land bank would rise by 126%. The companies also cited a combined European development pipeline of 13 million square feet and expanded long-term growth opportunities across logistics, energy and digital infrastructure.
Under the terms, SEGRO shareholders will receive 0.0920 new Prologis shares for each SEGRO share. Shareholders may elect a partial cash alternative, subject to a maximum aggregate cash amount of approximately £3.5 billion. Each shareholder's basic entitlement equals 25% of the fixed price of 1,031.7 pence per share, which would equate to 258 pence in cash and 0.0690 Prologis shares per SEGRO share. Elections above basic entitlement will be scaled back pro rata if cash demand exceeds the cap. SEGRO shareholders will also keep any 2026 interim dividend of up to 10.14 pence and any 2026 final dividend of up to 22.56 pence per share, which SEGRO intends to pay before closing. The cash component will be funded through a committed term loan facility, existing liquidity and other available sources.
Prologis expects the combination to enhance long-term earnings and return potential. In the first full year after completion, assuming annualized run-rate synergies, it anticipates a broadly neutral to minimally dilutive effect on Core FFO and AFFO per share, and it expects to maintain A2/A ratings from Moody's and S&P. The SEGRO board unanimously intends to recommend the transaction. Completion is expected in the first half of 2027, subject to SEGRO shareholder approval, court sanction of the scheme, applicable regulatory approvals and customary closing conditions. Prologis shareholder approval is not required, and Prologis will apply for a secondary listing of its shares on the London Stock Exchange, a condition to completion. Further details are set out in the Rule 2.7 announcement on the transaction microsite.
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