Prologis (NYSE:PLD) has reached an agreement to acquire Segro Plc (LSE:SGRO) in a transaction worth approximately £14.3 billion, combining two of the world’s largest industrial property owners. Once completed, the enlarged business will oversee around $269 billion of logistics real estate assets, significantly increasing Prologis’ scale across Europe.
Share-Based Offer Includes Optional Cash Element
The agreed offer values Segro at 1,031.7 pence per share, with investors receiving 0.0920 newly issued Prologis shares for each Segro share they own. The offer represents a 14.4% premium to Segro’s most recently reported net asset value of 902 pence per share.
Including the proposed 2026 final dividend of up to 22.56 pence per share, the overall value rises to 1,054.3 pence per share.
As an alternative, shareholders may elect to receive part of their consideration in cash. Up to £3.5 billion has been allocated for the cash option, representing one quarter of the total transaction value. Those selecting the standard mixed consideration will receive 258 pence in cash alongside 0.0690 Prologis shares for each Segro share held. If requests exceed the available cash pool, allocations will be reduced proportionally. Prologis said the cash component will be financed through committed borrowing facilities and existing cash resources.
Combination Creates a Much Larger European Platform
The acquisition will substantially strengthen Prologis’ position in Europe by adding Segro’s extensive warehouse portfolio. Together, the combined group will manage approximately 368 million square feet of logistics space across the continent.
The merger will also expand Prologis’ European development pipeline to around 13 million square feet while more than doubling its regional land bank, providing significant capacity for future projects.
“This deal brings together SEGRO’s exceptional portfolio and customer relationships with Prologis’ global platform, operating expertise and financial strength,” Prologis Chief Executive Daniel S. Letter said.
Segro Chief Executive David Sleath described the merger as “a compelling platform,” adding that it combines Segro’s assets and future development opportunities with Prologis’ “global scale, customer franchise and operational capabilities.”
Market Reaction and Financial Impact
According to Jefferies analyst Sarim Chaudhry, shareholders who accept the share-based offer will own roughly 8.9% of the combined business. They would also remain entitled to receive Segro’s interim dividend of up to 10.14 pence per share and its proposed final dividend for 2026.
Prologis expects the transaction to have little impact on Core FFO and AFFO per share during the first full year after completion, assuming expected operating synergies are achieved. The company also expects to preserve its current A2/A investment-grade credit ratings from Moody’s and S&P.
Board Recommends Transaction
Segro’s Board has unanimously backed the proposal and is recommending that shareholders vote in favour of the acquisition. Prologis does not require shareholder approval for the deal but plans to obtain a secondary listing on the London Stock Exchange before completion.
The transaction is expected to complete during the first half of 2027, subject to shareholder approval, court approval and the relevant regulatory clearances.
Prologis stock price
