Deutsche Annington €3.9 billion takeover of Gagfah

Overview:

• German real estate group Deutsche Annington (now Vonovia) acquired Luxembourg based competitor Gagfah in a cash and share takeover which valued the business at around €3.9 billion and made Deutsche Annington Germany's largest private residential landlord. 
• With a combined company market cap of €9 billion, the merger of the two Franfurt listed businesses created Europe's second largest public real estate group.
• Under the terms of the deal, Gagfah shareholders received the equivalent of €18 a share through a combination of cash and Deutsche Annington shares (five shares and €122.52 cash for 14 Gagfah shares).
• For Gagfah shareholders, the fee represented a 16% premium on the company's final closing share price prior to Deutsche Annington's offer.
• Deutsche Annington financed the takeover through a combination of a syndicated bridge loan and a capital increase.  
• Following the transaction's completion, Deutsche Annington has a portfolio of 350,000 rental properties estimated to be collectively worth €21 billion.  
• The acquisition of Gagfah strengthens Deutsche Annington's position in the rental markets of several large German cities, including Berlin and Hamburg. 
• Recently real estate company mergers and property portfolio acquisitions have been common in Germany where home-ownership is relatively low compared to the rest of Europe, as real estate investors have been divesting and landlords have been keen to take advantage of low borrowing costs and rising rents. 
• In 2013, Deutsche Wohnen, Germany's second largest landlord, acquired GSW Immobilien for €3.5 billion. 
• Following regulatory approval of the takeover of Gagfah, Deutsche Anningoton was rebranded Vonovia. 

Ben Naylor - Regional Editor