The takeover deal
British FTSE 100 property company Segro has reached an agreement to be acquired by US-based commercial landowner Prologis for £14.3 billion, with the transaction expected to be finalized in the first half of next year. Shareholders of Segro will receive 0.92 shares of Prologis for each Segro share they hold, with an option to receive a partial cash alternative totaling £3.5 billion. The final agreed price of 1,032p per Segro share represents a 39% increase from Segro's share price at the time of the first offer.
Market impact
The acquisition marks another significant departure from the London Stock Exchange, where 11 companies valued above £1 billion have left the market through takeovers this year. The transaction highlights growing pressure on the UK’s financial hub as major firms explore alternative ownership structures. The deal also reflects a broader trend in the real estate industry, where global players are consolidating assets and expanding their reach. During the negotiation process, the two companies had significant disagreements over the valuation of Segro’s speculative, long-dated development projects, which Prologis described as carrying substantial risk. Prologis will apply for a secondary share listing in London following the acquisition.
Leadership reactions
Prologis CEO Daniel Letter stated that the acquisition would unite Segro's impressive portfolio and strong customer relationships with Prologis' global infrastructure, operational knowledge, and financial resources. He emphasized that combining the strengths of both firms will generate more value for customers and shareholders alike. Letter added that the constructive engagement between leadership teams has reinforced confidence in the opportunity ahead.
Segro CEO David Sleath echoed this sentiment, noting that Prologis shares the company’s belief in the long-term demand for modern logistics and data center infrastructure. Sleath added that merging their complementary businesses would result in a powerful platform for future growth. He stated: 'We believe the combination would bring together two highly complementary businesses and create a compelling platform, combining Segro's exceptional portfolio and development pipeline with Prologis' existing European business and global scale, customer franchise and operational capabilities, while retaining a shared commitment to disciplined capital allocation, customers and people.'
The negotiations were not without conflict. Sleath had previously criticized Prologis’ initial £12.6 billion offer as 'opportunistic, one-sided, and inadequate.' In response, Prologis had claimed that Segro's valuation was unrealistic, citing the speculative nature of the firm's development projects. The final talks between the companies included a key meeting held over the weekend before Prologis submitted its revised bid. Segro criticized Prologis for not presenting a further offer, while Prologis stated the meeting was to gauge whether a credible deal could be negotiated. Segro had previously rebuffed three takeover offers from Prologis, with the most recent previous move worth about £13.5 billion.
As part of the deal, Segro shareholders will also receive the company's interim dividend of 10.14p per share, along with the final dividend to be declared in March. Prologis stated that the final agreed price represents a 39% increase from Segro's share price at the time of the first offer.