BERLIN – Germany’s top property group Vonovia yesterday announced plans for a €19 billion merger with rival Deutsche Wohnen to form a giant in the sector.
“To tackle both the housing shortage and climate change more efficiently and robustly, Vonovia and Deutsche Wohnen are joining forces,” said the company in a statement.
The proposed deal comes after two previous attempts failed to come off, the last having been rejected by Deutsche Wohnen in 2016.
But this latest offer prices Deutsche Wohnen shares at well above their current market value, which stood at €44.99 on close of trade on the Frankfurt exchange on Friday.
The markets in Germany are closed for a public holiday yesterday.
Deutsche Wohnen shareholders will be offered €53.03 per share: 52 in cash, and the rest as company dividend for the financial year of 2020, said the statement.
The previous purchase offer in 2016 saw Deutsche Wohnen oppose the merger, saying the proposed price was too low.
In Germany, where around 85% of residents are renters, Vonovia and Deutsche Wohnen play a premier role in the housing sector.
The merger will give birth to a giant of more than 500,000 homes.
The two promised to work closely with political decision makers on the sensitive issue of housing supply and prices.
They pledged to limit rent increases until 2026 and build new apartments in the capital Berlin, which has been hit for years by runaway rent and a lack of affordable housing. – AFP, May 25, 2021
