German housing giants Deutsche Wohnen and Vonovia have agreed to merge in a deal that will create Europe’s largest residential real estate group with a combined market capitalisation of around €45 billion but with a total real estate portfolio worth about €90 billion.
Vonovia will make a cash offer of €52 per Deutsche Wohnen share and a cash dividend of €1.03 per share will be paid to Deutsche Wohnen shareholders for the 2020 financial year, bringing the value of the offer to €53.03 per Deutsche Wohnen share.
The deal represents a premium of 17.9 % on Deutsche Wohnen’s 21 May closing price and 25 % against the three-month volume-weighted average price of Deutsche Wohnen shares at the same date. The deal is subject to a minimum acceptance rate of 50% of the outstanding shares in Deutsche Wohnen as well as statutory approvals.
If the bid is successful, the combined company will be called Vonovia SE and the headquarters will remain in Bochum where Vonovia is currently based, although it will be managed from Bochum and Berlin, Deutsche Wohnen’s current headquarters location.
Roles allocated to Deutsche Wohnen directors
Rolf Buch will remain Vonovia’s CEO. Deutsche Wohnen’s CEO Michael Zahn is to be appointed as deputy chairman of the management board and DW’s CFO Philip Grosse will become chief financial officer of Vonovia. An executive committee is to be established beneath the management board, on which DW’s chief development officer Henrik Thomson and chief operating officer Lars Urbansky will serve.
Michael Zahn and Vonovia’s present CFO, Helene von Roeder, are to become members of the supervisory board of Deutsche Wohnen.
The combined businesses will have a social and sustainable housing policy and have concluded a “Future and Social Housing Pact” with the federal state of Berlin.
This is not the first time that Vonovia has attempted a merger with Deutsche Wohnen. In 2015 the company attempted a €14 billion hostile takeover bid but did not win the support of Deutsche Wohnen shareholders. However, it did remain among the company’s largest shareholders until 2019 when it sold a stake worth around €730 million.
Vonovia was originally Deutsche Annington but changed its name having acquired Gagfah in 2015 when it became Germany’s largest real estate group. It acquired Conwert Immobilien and BUWOG in 2018 and has owned 100% of Sweden’s Victoria Park since 2019.