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Prologis’ $26B acquisition of Duke Realty approved by shareholders

Deal to close in early October

A Hub Group container docked at a Prologis facility. (Photo: Jim Allen/FreightWaves)

Prologis announced Wednesday after the market closed that shareholders approved the proposed $26 billion all-stock acquisition of Duke Realty. In separate votes both held Wednesday, 87% of Prologis shareholders and 85% of Duke Realty shareholders agreed to the terms of the merger.

“Upon consummation of the merger, Duke Realty shareholders will receive 0.475 of a newly-issued share of Prologis common stock for each share of Duke Realty common stock they own immediately prior to the effective time of the merger,” a news release read.

The issuance of new Prologis (NYSE: PLD) shares and the assumption of Duke’s nearly $4 billion in debt make up the purchase price.

The deal is expected to close in early October subject to closing conditions, the release stated. A Worker Adjustment and Retraining Notification issued Sept. 16 pointed to a scheduled closing date of Monday. The notice showed that Duke Realty (NYSE: DRE) is laying off 120 employees, half of whom are in accounting and IT, as part of the transaction.

Acquisition price~$25.6 billion
Duke Realty annual revenue (2021)$1.1 billion (167 million square feet of space)
Prologis annual revenue (2021)$4.8 billion (1 billion square feet of space)
Acquisitions by PrologisLiberty Property Trust, DCT Industrial Trust and KTR Capital Partners
Financingcompany stock
Table: Company reports

The deal will add nearly 550 logistics properties and 167 million square feet of space to Prologis’ 1-billion-square-foot portfolio. Duke Realty also has development projects representing 11 million square feet of space in progress. Prologis previously said it would retain 94% of Duke’s portfolio, exiting an undisclosed market.

The transaction is forecast to be immediately accretive, adding 20 cents to 25 cents per share in core funds from operations (FFO) in year one with incremental synergies and value creation expected in the out years. Analysts currently expect Prologis to generate FFO of $5.71 per share in 2023.

Goldman Sachs (NYSE: GS) and Citigroup (NYSE: C) are serving as financial advisers to Prologis. Morgan Stanley (NYSE: MS) is the lead adviser to Duke.

Prologis Ventures is an investor in FreightWaves.

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Todd Maiden

Based in Richmond, VA, Todd is the finance editor at FreightWaves. Prior to joining FreightWaves, he covered the TLs, LTLs, railroads and brokers for RBC Capital Markets and BB&T Capital Markets. Todd began his career in banking and finance before moving over to transportation equity research where he provided stock recommendations for publicly traded transportation companies.