Deutsche Wohnen to buy LEG Immobilien in €4.62bn deal

German real estate group Deutsche Wohnen has made an all-share offer for competitor LEG Immobilien that values the company at around €4.62bn.

In a joint statement released on Sunday, Deutsche Wohnen said it has offered 33 of its shares in exchange for every 10 LEG shares. This represents a premium of around 13% to LEG’s closing price pre-announcement and a premium of around 20% in relation to LEG’s volume-weighted average price over the last three months.

The combined company will have around 250,000 residential units and a portfolio value of approximately €17bn.

Thomas Hegel, chief executive officer of LEG said: “The combination is the next logical step as both companies pursue the same business philosophy and complement each other regionally very well.

“This creates a strong base for a successful joint future. We are convinced that under a single roof we will generate significant value added for shareholders, employees and for our tenants.”

After conclusion of the business combination and the tender of all LEG shares, the former Deutsche Wohnen shareholders would hold around 61 % of the shares, and the former LEG shareholders would hold around 39 % in the combined company.

At 1120 BST, Deutsche Wohnen shares were down 6.7% at €22.45 while LEG shares were up 4.4% at €73.36.