Segro, the UK-listed owner of industrial and logistics property, has accepted a takeover proposal from U.S. rival Prologis worth up to £14.3 billion ($19.19 billion), the companies announced on Tuesday. The agreement follows investor calls for engagement and comes after Segro rebuffed three earlier approaches from Prologis.
The transaction further cements a busy year for corporate deals in the United Kingdom and is the second-largest announced so far this year, trailing only a $65 billion food business merger involving Unilever. LSEG data indicate the transaction ranks among the largest foreign takeovers of a UK-listed company on record.
Under the terms disclosed, the offer is made up of 0.0920 Prologis shares per Segro share, together with a partial cash alternative of up to 3.5 billion and a potential final dividend. The companies also indicated a possible secondary listing in London for the combined group. If completed, Segro shareholders would hold roughly 8.9% of the new entity.
The offer equates to up to 10.54 per Segro share and represents a 42% premium to Segros closing share price on June 23, the trading day before Prologis publicly disclosed its interest. Segros shares closed up 1.4% at 9.75 on Tuesday but remained below the agreed maximum price. Prologis shares were down 2.31% during U.S. trading hours.
Segro owns approximately 10.9 million square metres (117 million sq. ft) of space across Europe. Prologis and Segros combined market capitalisation stood at more than $152 billion as of Monday. Prologis counts major logistics customers including Amazon, FedEx and UPS, and the two companies have been collaborating on building a data centre pipeline aimed at capitalising on demand related to artificial intelligence.
Investors including APG Asset Management, Norges Bank and CCLA Investment Management had publicly urged the businesses to hold talks, saying a combination could be valuable. CCLA, Norges Bank and APG declined to comment on Tuesday.
"Prologis and Segro believe that the combination offers a compelling opportunity to Segro shareholders," the companies said in a joint statement.
UK takeover rules provided a timeline under which the companies had until August 12 to finalise a deal. Segro had signalled last month that it was minded to accept a "best and final proposal" from Prologis after previously rejecting three bids.
Financial advice on the transaction was provided by multiple banks. Evercore, Morgan Stanley, Goldman Sachs and UBS advised Segro. Prologis was advised by Rothschild, J.P. Morgan, Eastdil Secured, Citigroup, and BofA Securities. The companies reiterated the exchange rate used for disclosure: $1 = 0.7450 pounds.
Market reaction was mixed on announcement day: Segros stock rose modestly but did not reach the maximum offer level, while Prologis shares slipped in U.S. trading. The proposal combines equity consideration, a sizeable cash option and the prospect of a final dividend, and would leave Segro equity holders as a minority stakeholder in the merged business.
The deal highlights continued consolidation in European logistics property and international interest in UK-listed assets, while also reflecting investor influence in prompting management-level negotiations.