Prologis to Acquire UK's Segro for $19.2 Billion in Logistics Mega-Deal

U.S. logistics firm Prologis has agreed to acquire its British rival Segro in a deal valued at up to £14.3 billion ($19.19 billion), the companies announced Tuesday. The acquisition, which follows sustained pressure from institutional investors, will create a global powerhouse in warehouse and industrial property.

The Agreed Terms

The accepted offer values Segro at up to £10.54 per share, representing a 42% premium to the company's closing price on June 23, the day before Prologis first publicized its interest. Segro had previously rejected three offers from its U.S. competitor before indicating last month it would support a final proposal.

The terms of the deal are structured as a mix of stock and cash. Key components include:

• 0.0920 Prologis shares for each Segro share.
• A partial cash alternative of up to £3.5 billion.
• A potential final dividend for Segro shareholders.

Upon completion, Segro shareholders are expected to hold approximately 8.9% of the combined entity. The companies also noted the possibility of a secondary London listing for the merged group.

Investor-Driven Merger

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The deal was largely driven by major Segro shareholders who publicly urged the two companies to negotiate. Investors including APG Asset Management, Norges Bank, and CCLA Investment Management had argued that a combination would be highly valuable, according to previous reports.

In a joint statement, Prologis and Segro said they "believe that the combination offers a compelling opportunity to Segro shareholders." As of Monday, the two companies had a combined market capitalization of more than $152 billion. The merger combines two significant portfolios, with Segro owning around 10.9 million square meters of space across Europe and Prologis counting major firms like Amazon, FedEx, and UPS among its clients.

Market Impact and Context

This transaction marks one of the largest-ever foreign takeovers of a UK-listed company, according to LSEG data, and contributes to a record year for mergers and acquisitions in the United Kingdom. It is the second-largest UK deal announced this year.

On Tuesday, Segro's shares closed up 1.4% at £9.75, still trading below the final offer price. In contrast, Prologis shares were down 2.31% during U.S. trading hours. The deal also highlights a strategic push by both firms to expand their data center pipelines to capitalize on growth in the artificial intelligence sector.