Prologis (NYSE:PLD) has agreed to acquire Segro Plc (LSE:SGRO) in a transaction valued at approximately $18.8 billion, creating the world’s largest logistics real estate company with around $269 billion of assets under management. The deal reflects continued demand for industrial and warehouse properties across key global markets and significantly expands Prologis’ presence in Europe.
Shareholders Offered Shares or Partial Cash Alternative
Under the agreed terms, Segro shareholders will receive 0.0920 new Prologis shares for each Segro share they own, valuing the UK logistics property group at 1,031.7 pence per share. This represents a 14.4% premium to Segro’s reported net asset value of 902 pence per share.
Including Segro’s proposed final dividend for 2026 of up to 22.56 pence per share, the implied value of the transaction increases to 1,054.3 pence per share, equivalent to approximately £14.3 billion.
Shareholders will also have the option of electing a partial cash alternative, with up to £3.5 billion available in total, representing 25% of the overall consideration. Investors choosing the standard cash option will receive 258 pence in cash together with 0.0690 new Prologis shares for each Segro share held. Should demand for cash exceed the available allocation, payments will be reduced on a pro-rata basis. The cash element will be financed through a committed term loan facility and existing liquidity.
Deal Significantly Expands European Portfolio
Following completion, the combined business will own a European operating portfolio spanning approximately 368 million square feet. The acquisition will increase Prologis’ European footprint by 47%, while also adding a 13 million square foot development pipeline and expanding its European land bank by 126%.
“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 transaction as “a compelling platform,” adding that it would combine Segro’s portfolio and development pipeline with Prologis’ “global scale, customer franchise and operational capabilities.”
Analysts Highlight Long-Term Benefits
Jefferies analyst Sarim Chaudhry, who has a “hold” rating and a 1,000 pence price target on Segro, noted that shareholders opting for the standard share consideration would own approximately 8.9% of the enlarged company. They would also remain eligible to receive Segro’s 2026 interim dividend of up to 10.14 pence per share, in addition to the proposed final dividend.
Prologis said the acquisition is expected to have a broadly neutral to only minimally dilutive effect on Core FFO per share and AFFO per share during the first full year after completion, assuming expected cost synergies are realised. The company also expects to retain its A2/A investment-grade credit ratings from Moody’s and S&P.
Completion Expected in 2027
The Segro Board has unanimously recommended that shareholders approve the transaction. The acquisition does not require approval from Prologis shareholders, although the U.S. company intends to obtain a secondary listing on the London Stock Exchange before the deal completes.
The transaction is expected to close during the first half of 2027, subject to approval from Segro shareholders, court sanction and the necessary regulatory clearances.
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