Vonovia wants to take over Deutsche Wohnen
The real estate groups Vonovia and Deutsche Wohnen want to merge. The merger would create Europe's largest residential real estate group with a market capitalization of 45 billion euros.
The merged company, to be known as Vonovia SE and headquartered in Bochum, will have a portfolio of more than 500,000 apartments with a combined real estate value of just under €90 billion. Vonovia owns around 415,000 apartments mainly in Germany, but also in Sweden and Austria. The portfolio value is around 59 billion euros. Berlin-based Deutsche Wohnen holds just under 157,500 residential and commercial units, three quarters of which are located in Berlin.
Vonovia is offering Deutsche Wohnen shareholders a total of €53.03/share, which represents a premium of almost 18% to the closing price of Deutsche Wohnen shares on May 21, 2021, and 25% based on the weighted average price over the past three months. The offer values the real estate company at 18 billion euros.
This is now the third time that Vonovia has wanted to take over Deutsche Wohnen. The last time was five years ago, when a takeover failed due to resistance from Deutsche Wohnen. Now, however, the management board and supervisory board of the real estate company support the offer. Michael Zahn, CEO of Deutsche Wohnen, is to be appointed Deputy Chairman of the Management Board and Philip Grosse, CFO of Deutsche Wohnen, is to be appointed Chief Financial Officer of Vonovia.
Corporations want to sell apartments to the state of Berlin
Deutsche Wohnen, as well as Vonovia and other large landlords, are currently under massive pressure in Berlin: The referendum "Expropriate Deutsche Wohnen and Co." is underway in the capital, with the aim of nationalizing companies that hold more than 3,000 apartments. This would affect 200,000 apartments, most of which belong to Deutsche Wohnen. The initiative, which is campaigning against sharply rising rents, has received a large following, since the German Constitutional Court overturned the so-called rent cap. It could come down to a referendum in the fall.
It is probably also against this backdrop that Vonovia and Deutsche Wohnen have announced their intention to assume "responsibility for a social and sustainable housing policy". As a "contribution to the expansion of the municipal housing stock," the two companies want to sell the state of Berlin "a significant number" of apartments from their portfolio - around 20,000 units are to be involved. Other plans include a cap on rent increases until 2026, more new construction and discounted apartments for young families.
According to Vonovia, the takeover offer is expected to be completed by the end of August. It is subject to a minimum acceptance level of 50%.
