Deutsche Wohnen AG, which is fighting an unsolicited bid by a bigger competitor, agreed to buy about 13,500 homes from Patrizia Immobilien AG for around 1.1 billion euros ($1.2 billion).
The apartments -- most of which are located in Berlin, Kiel, Munich, Cologne/Düsseldorf, Munich, Hamburg and Frankfurt -- are held in Patrizia’s “Harald” portfolio, according to a statement from Patrizia on Friday.
An acquisition may scuttle Vonovia’s 9.9 billion-euro bid for Deutsche Wohnen, based on the terms of the offer document. Deutsche Wohnen Chief Executive Officer Michael Zahn has vowed to do everything in his power to stop Vonovia’s bid, saying that the terms undervalue Deutsche Wohnen’s growth potential and that Vonovia won’t be able to achieve the promised cost savings.
Buying Patrizia’s assets, which Deutsche Wohnen plans to finance with cash and bank loans, poses another obstacle. In a preliminary offer published in October, Vonovia said the transaction won’t be “consummated” if Deutsche Wohnen acquires “material assets.”
Vonovia shareholders are scheduled to vote at a meeting on Monday on whether to proceed with the takeover.
In its own statement Friday, Deutsche Wohnen said it has acquired about 15,200 residential units since midyear, including the ones purchased from Patrizia. The two transactions will be financed about half with cash and half with bank loans, the company said.