Prologis, the largest publicly traded industrial real estate company in the United States, has submitted a “best and final” proposal worth roughly £14.0 billion (about $18.7 billion) to acquire SEGRO plc, the largest listed property company in the United Kingdom. SEGRO’s board said on July 22 that it is “minded to recommend” the terms to shareholders, though no binding deal has been signed.
The proposal, detailed in a joint regulatory announcement, would combine two of the world’s largest owners of warehouses and data center land into a single company spanning North America, the United Kingdom and continental Europe. SEGRO owns and develops logistics parks and data center sites across the UK, France, Germany, Italy, Spain and other European markets.
Under UK takeover rules, the companies are not yet at a finish line. Prologis must announce by 5 p.m. London time on August 12 whether it will make a firm, binding offer or walk away, according to an update Prologis filed confirming the UK Takeover Panel granted an extension of that deadline. Until a firm offer is made under Rule 2.7 of the UK Takeover Code, the companies caution there is “no certainty” the deal will happen.
Deal terms
The best-and-final proposal offers SEGRO shareholders 0.0920 new Prologis shares for each SEGRO share held, with the option to take up to £3.5 billion in cash instead — about 25% of the total consideration — at a fixed price of 1,031.7 pence per share, the companies said. That values SEGRO at roughly 14% above its pro forma adjusted net asset value of 905 pence per share as of June 30, and about 39% above SEGRO’s closing share price on June 23, the last trading day before Prologis’s approach became public.
Prologis first approached SEGRO’s board on June 16 with an all-stock proposal that the board rejected a week later, according to a filing Prologis made with the U.S. Securities and Exchange Commission. SEGRO’s board rejected at least one further revised proposal in mid-July before agreeing that the improved terms announced July 22 were strong enough to recommend, pending confirmatory due diligence and agreement on final conditions.
Why Prologis wants the deal
Prologis has argued, in its own investor materials, that its financial scale and data center development platform could unlock more value from SEGRO’s logistics and data center pipeline than SEGRO could achieve on its own. The company said its data center team is developing roughly 30 projects representing 5.8 gigawatts of power capacity, and pointed to a gap between the two companies’ recent shareholder returns to make its case — claims that reflect Prologis’s own framing of the deal’s merits rather than independently verified figures.
SEGRO’s board had pushed back on Prologis’s earlier offers as undervaluing the company. Before the board’s endorsement, one SEGRO investor told Bloomberg that an earlier all-stock proposal came in below the value of SEGRO’s underlying property portfolio.
If a firm offer is ultimately made and completed, SEGRO shareholders would own approximately 8.9% of the combined company, and Prologis has committed to establishing a secondary listing on the London Stock Exchange, according to the companies’ disclosures.
What it means
Verified: Prologis has proposed roughly $18.7 billion in stock and cash for SEGRO, and SEGRO’s board supports the terms as they stand, but the two sides have not signed a binding merger agreement. Prologis has until August 12 to make a firm offer or drop the approach.
Attributed interpretation: Bloomberg’s reporting on investor pressure suggests some SEGRO shareholders viewed Prologis’s earlier bids as light relative to the company’s asset value, which helps explain why the price rose across several rounds before the board signaled support.
RealtyWire analysis: A completed deal would rank among the largest-ever combinations of publicly traded industrial REITs, arriving as large real estate investors continue to consolidate logistics and data center holdings — a trend also visible in Public Storage’s completed acquisition of National Storage Affiliates. It would also tie Prologis more closely to warehouse and industrial demand overseas at a time when U.S. industrial vacancy has been rising in some metro markets.
What to watch
The immediate marker is whether Prologis files a firm offer under Rule 2.7 by the August 12 deadline. If it does, the process would move to a SEGRO shareholder vote and regulatory review in the UK and any other relevant jurisdictions. Because a large share of the consideration is in Prologis stock, the final value of the deal in both pounds and dollars will continue to move with Prologis’s share price and the GBP/USD exchange rate until any transaction closes.
