Deutsche Wohnen AG’s offer to buy residential landlord GSW Immobilien AG in the biggest German real estate acquisition in five years was accepted by enough GSW shareholders to proceed.
Investors holding more than 75 percent of GSW shares agreed to a share swap that values the company at about 1.7 billion euros ($2.3 billion), Deutsche Wohnen said in a statement today. The purchase is valued at 3.5 billion euros including debt, making it the biggest since at least 2008, when Goldman Sachs Group Inc. bought German rental-home owner LEG NRW for about the same amount, according to data compiled by Bloomberg.
“We have received a clear mandate from both shareholder groups,” Deutsche Wohnen CEO Michael Zahn said in the statement.
Both GSW and Deutsche Wohnen are focused on Berlin, where home-price and rent gains have outpaced the rest of the country. The merger will create a company with about 150,000 apartments, valued at 8.5 billion euros. It will be Germany’s second-biggest landlord after Deutsche Annington Immobilien SE.
Deutsche Wohnen shares rose 1 percent to 13.92 euros at 1:32 p.m. in Frankfurt trading. GSW stock climbed 1.4 percent to 34.24 euros.
The total amount of acceptances will be published on Nov. 4, today’s statement said. GSW shareholders who have not participated in the swap can do so until Nov. 18.
Deutsche Wohnen made its offer on Aug. 20, about two months after GSW’s chief executive officer Bernd Kottmann and its chairman resigned following investor complaints about the way Kottmann was hired. Deutsche Wohnen CEO Michael Zahn said at the time that he took advantage of the power vacuum to make a bid for a competitor he has considered buying since before GSW’s initial public offering in 2011.
GSW management on Oct. 14 recommended that shareholders accept the bid and said its co-CEOs Joerg Schwagenscheidt and Andreas Segal will become chief operating officer and chief financial officer, respectively, of the combined company.
Deutsche Annington Immobilien SE is Germany’s biggest residential landlord, with 180,000 apartments and a market value of 4.4 billion euros.