Deutsche Wohnen gave an all-share bid amounting to USD 2.34 billion or EUR 1.75 billion for its real estate group competitor GSW Immobilien. In a statement, Deutsche Wohnen revealed that for every 20 shares in GSW, it would be offering 51 of its shares. This would allow stakeholders from GSW a 43% stake in the combined firm. The merger is slated to be completed in the first half of 2014.
The enlarged company would focus on the burgeoning real estate market in Berlin. Deutsche Wohnen said in a statement, "With more than two thirds of the combined portfolio located in Berlin, the combined company would have a strong focus on one of the most dynamic growth regions in Germany."
Once completed, Deutsche Wohnen also expects the deal to result in synergies amounting to about EUR 25 million annually. Other benefits that would be gleaned from the transaction include curtailing costs. "The complementary portfolio, particularly in Berlin, will result in increased economies of scale in the management and administration of properties as well as savings on the procurement side," Deutsche Wohnen added.
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