In July 2021, German real estate giant Vonovia announced its plans to acquire its competitor Deutsche Wohnen in a €19 billion deal. The acquisition is set to create Europe’s largest real estate company, with more than 500,000 apartments in Germany alone. In this blog, we will take a closer look at the acquisition from Vonovia of Deutsche Wohnen and its costs.
Vonovia’s acquisition of Deutsche Wohnen is a cash deal, with Vonovia offering €52 per share for all outstanding shares in Deutsche Wohnen.
Benefits of the Acquisition
The acquisition of Deutsche Wohnen will allow Vonovia to strengthen its position as the leading real estate company in Europe. The deal will create a company with a market value of around €45 billion, surpassing its closest competitor, LEG Immobilien AG, which has a market value of around €18 billion.
Vonovia will also gain access to Deutsche Wohnen’s portfolio of apartments in desirable locations across Germany, including Berlin, Frankfurt, and Munich. This will allow Vonovia to expand its business and increase its revenue.
Costs of the Acquisition
The acquisition of Deutsche Wohnen is set to cost Vonovia approximately €19 billion, making it one of the largest real estate deals in history. Vonovia plans to finance the acquisition through a combination of debt and equity. The company has already secured a bridge loan of €18 billion to finance the acquisition.
The acquisition will also come with other costs, such as legal and advisory fees. These costs are expected to be in the millions of euros.
In conclusion, the acquisition from Vonovia of Deutsche Wohnen is set to create a real estate giant in Europe. The deal will come with a high cost, but it is expected to provide significant benefits to Vonovia and its shareholders. The acquisition is still subject to regulatory approval, but it is expected to be completed by the end of 2021.