US real estate investment trust Prologis has agreed to acquire UK property investment and development company Segro.
The agreed deal would value Segro at approximately $18.8bn, with completion expected during the first half of 2027.
The “combination expands Prologis' European platform and enhances long-term growth opportunities”, Prologis said in a statement.
Under the agreed terms, Segro shareholders will receive 0.0920 new Prologis shares for each Segro share.
They may also choose to receive cash for some or all of that consideration through a partial cash alternative, subject to the terms of the offer.
Segro shareholders will remain entitled to receive any 2026 interim dividend of up to 10.14 pence ($0.14) per share and any 2026 final dividend of up to 22.56 pence per share, which the company intends to distribute before the transaction completes.
The partial cash alternative provides a maximum aggregate cash pool of approximately £3.5bn.
Each shareholder's basic entitlement is set at 25% of the fixed price of 1,031.7 pence (£10.317) per Segro share.
A shareholder taking only the basic entitlement would receive 258 pence (£2.58) in cash and 0.0690 new Prologis shares for each Segro share.
Shareholders may elect to receive more or less than their basic entitlement.
Requests for cash exceeding the basic entitlement will be reduced on a pro rata basis if total cash elections surpass the available amount.
Those not choosing the cash option will receive 0.0920 new Prologis shares for each Segro share.
Prologis said the cash component would 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.
Its European operating portfolio would total 368 million square feet, while the combined European development pipeline would reach 13 million square feet.
The transaction would also expand Prologis' European land bank by 126%.
The transaction requires approval from Segro shareholders, court sanction of the scheme, regulatory clearances and other customary closing conditions.
Prologis shareholder approval is not required.
The company will also seek a secondary listing on the London Stock Exchange, with approval forming a condition of completion.
Prologis CEO Daniel S Letter said: “We are pleased to have reached agreement with the Segro Board on a combination that we believe will create meaningful value.
"This deal brings together Segro's exceptional portfolio and customer relationships with Prologis' global platform, operating expertise and financial strength.”
