Warehouse giant Prologis on Monday said it is acquiring Duke Realty in an all-stock transaction valued at about $26 billion, including debt. The respective board of directors for Prologis and Duke Realty have unanimously approved the deal.
“We have admired the disciplined repositioning strategy the Duke Realty team has completed over the last decade,” Prologis co-founder, Chairman and CEO Hamid Moghadam said in a statement. “They have built an exceptional portfolio in the U.S. located in geographies we believe will outperform in the future. That will be fueled by Prologis’ proven track record as a value creator in the logistics space. We have a diverse model that allows us to deliver even more value to customers.”
With the transaction, Prologis is gaining high-quality properties for its portfolio in key geographies, including New Jersey, Southern California, South Florida, Chicago, Dallas and Atlanta.
The acquisition on an owned and managed basis comprises:
- 153 million square feet of operating properties in 19 major U.S. logistics geographies;
- 11 million square feet of development in progress — about $1.6 billion in total expected investment;
- 1,228 acres of land owned and under option with a buildout of approximately 21 million square feet.
Prologis plans to hold approximately 94% of the Duke Realty assets and exit one market.
“This transaction is a testament to Duke Realty’s world-class portfolio of industrial properties, long-proven success and sustainable value creation we’ve delivered over the years,” Duke Realty Chairman and CEO Jim Connor said in a statement. “We have always respected Prologis, and, after a deliberate and comprehensive evaluation of the transaction and the improved offer, we are excited to bring together our two complementary businesses. Together, we will be able to accelerate the potential of our business and better serve tenants and partners. We are confident that this transaction — including the meaningful opportunity it provides for shareholders to participate in the growth and upside from the combined portfolio — is in the best long-term interest of Duke Realty shareholders.”
Under the terms of the agreement, Duke Realty shareholders will receive 0.475 of a Prologis share for each Duke Realty share they own.
The transaction is currently expected to close in the fourth quarter of 2022.
Goldman Sachs Group Inc. and Citigroup are serving as financial advisers and Wachtell, Lipton, Rosen & Katz is serving as legal adviser to Prologis. Morgan Stanley & Co. LLC is serving as the lead financial adviser and Hogan Lovells US LLP is serving as legal adviser to Duke Realty. J.P. Morgan Securities LLC and Alston & Bird LLP are also serving as financial and legal advisers, respectively, to Duke Realty.
