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Aroundtown agrees to buy TLG Immobilien in 3.1b euro deal
[BERLIN] Aroundtown SA agreed to buy TLG Immobilien AG for 3.1 billion euros (S$4.6 billion) in stock to create Germany's biggest commercial landlord.
The deal values TLG shares at 27.66 euros each, 3.2 per cent more than Monday's closing price, Luxembourg-based Aroundtown said in a statement. A tie-up would create a company with more than 25 billion euros of assets, bringing together the deal-making acumen of Aroundtown with the development expertise of TLG.
"The transaction with Aroundtown is a unique opportunity for TLG to strengthen our presence in key cities in Germany as well as access new markets," TLG said in the statement. The firm will be able to "attain a financial profile that would have been hard to achieve on our own."
Germany is set to knock the UK off its perch as Europe's most active property market, as yield-hungry investors bet the region's traditional growth engine will bounce back from its current economic malaise. Investors poured 49.4 billion euros into German commercial real estate in the 10 months through October, surpassing the 35.1 billion euros of deals in the UK
A merger could improve share liquidity and lead to a potential inclusion in the DAX index, says analyst Tim Leckie of JPMorgan Securities Plc. A deal would also create savings and prevent rivals from scaling up through similar mergers, he said when talks started in September.
TLG climbed 2.4 per cent to 27.45 euros at 9:23 a.m. on Tuesday, while Aroundtown was little changed.
The combined company will be renamed, but continue to have its German headquarters in Berlin. Ouram Holding SA, TLG's largest shareholder with a 28 per cent stake, has accepted the bid.
"In Germany, construction is unable to keep up with demand in almost all major cities," Marcus Lemli, head of Savills Plc's German operation, said last week.