BY Richard Summerfield
UK real estate company Segro has accepted a $19bn takeover offer from US rival Prologis, concluding a long-running discussion to determine Segro’s future.
Under the terms of the deal, Segro shareholders will receive 0.0920 new Prologis shares for each Segro share held. Shareholders may elect to receive cash in lieu of some or all of their Prologis share consideration, subject to the terms of the partial cash alternative. Segro shareholders will also be entitled to receive and retain any 2026 interim dividend of up to 10.14p per Segro share and any 2026 final dividend of up to 22.56p per Segro share, which Segro intends to pay prior to closing.
The maximum aggregate amount of cash available under the partial cash alternative is approximately £3.5bn. Each Segro shareholder's basic entitlement under the partial cash alternative is equal to 25 percent of the fixed price of 1031.7 pence per Segro share. Accordingly, a shareholder electing to receive only its basic entitlement would receive 258 pence in cash and 0.0690 new Prologis shares for each Segro share.
The boards of both companies have agreed to the deal and the Segro board has announced its intention to unanimously recommend it to shareholders. The transaction is expected to close in the first half of 2027, subject to the requisite approvals of Segro shareholders, sanction of the scheme by the court, receipt of applicable regulatory approvals and satisfaction of customary closing conditions.
According to Prologis, the cash component of the deal will be financed through a committed term loan facility, existing liquidity and other available funding sources. Following completion, the combined company is expected to manage approximately $269bn of assets. With a European operating portfolio of 368 million square feet and a combined European development pipeline of 13 million square feet.
“We are pleased to have reached agreement with the SEGRO Board on a combination that we believe will create meaningful value,” said Daniel S. Letter, chief executive of Prologis. “This deal brings together SEGRO’s exceptional portfolio and customer relationships with Prologis’ global platform, operating expertise and financial strength. We have great respect for SEGRO, its people and the business they have built over many years. The constructive engagement between our leadership teams throughout this process has reinforced our confidence in the opportunity ahead.
“As we move forward, we will approach the work ahead thoughtfully and deliberately. We look forward to building on the strengths of both companies and creating even greater value for our customers and shareholders," he added.
“SEGRO has built a unique business over many decades, assembling an irreplicable portfolio of high-quality industrial, logistics and data centre assets in some of Europe's most attractive locations,” said David Sleath, chief executive of Segro. “Through the dedication of our people and the strength of our customer relationships, we have a proven track record of value creation over many years.
“Prologis shares our conviction in the long-term structural drivers underpinning demand for modern logistics and data centre infrastructure,” he continued. “We believe the combination would bring together two highly complementary businesses and create a compelling platform, combining SEGRO’s exceptional portfolio and development pipeline with Prologis’ existing European business and global scale, customer franchise and operational capabilities, while retaining a shared commitment to disciplined capital allocation, customers and people. Prologis’ proposal provides SEGRO shareholders with a compelling opportunity to realise the value created by SEGRO and benefit from the future growth of the Combined Group.”
News: UK’s Segro agrees $19 billion Prologis takeover after investor pressure