German estate agents Deutsche Annington Immobilien said yesterday that it had agreed to acquire Gagfah, a Luxembourg-based owner and manager of residential properties, in a deal that values the company at €3.9bn (£3.1bn).
The deal would create a combined company with a portfolio of roughly 350,000 residential property units worth around €21bn.
The cash-and-stock offer works out to €18 a share for Gagfah, representing a 16.1 per cent premium to the company’s closing price on Friday.
“This combination is equally attractive for tenants and shareholders,” Rolf Buch, Deutsche Annington’s chief executive, said in a news release. “We aim to create the leading company of European dimensions within the German housing market.”
Shares of Gagfah rose 12.74 per cent to €17.48 yesterday. Shares of Deutsche Annington were down 2.74 per cent to €25.19. The companies expect to achieve about €84m in savings.
Buch would be chief executive of the combined company. Thomas Zinnoecker, the chief executive of Gagfah, would serve as deputy.
The deal is contingent on regulatory approval and the backing of investors who hold at least 50 per cent of Gagfah’s shares. The board of Gagfah said it intended to support the offer.
Gagfah has a portfolio of residential properties that includes about 141,000 units, mostly in large German cities.
Deutsche Annington, based in Dusseldorf, has about 210,000 residential units in its portfolio and employs about 3,400 people.
By acquiring Gagfah, Deutsche Annington would strengthen its footprint in Berlin, Hamburg and Dresden, complementing its own position in west and south Germany.
Deutsche Annington was advised by JP Morgan Chase, Kempen & Company and Puhl & Company, and by the law firm Sullivan & Cromwell.