Prologis agrees £14bn acquisition of Segro

Prologis has agreed to acquire British warehouse owner Segro in a transaction valuing the London-listed company’s issued and prospective share capital at approximately $18.8bn, equivalent to about £14bn.

The recommended offer gives Segro shareholders 0.0920 new Prologis shares for each share they hold. A partial cash alternative, capped at an aggregate £3.5bn, will allow investors to receive part of their consideration at a fixed price of 1,031.7p per Segro share.

Shareholders electing only for their basic cash entitlement would receive 258p and 0.0690 Prologis shares for each Segro share. Those who do not participate will receive the full share consideration, while elections above the basic cash entitlement could be scaled back if demand exceeds the available amount.

Segro shareholders will also be entitled to retain an interim dividend of up to 10.14p per share and a final dividend of up to 22.56p, provided the payments are made before the transaction completes. They are expected to own about 8.9% of the enlarged group.

Prologis chief executive Daniel Letter said: “This deal brings together SEGRO’s exceptional portfolio and customer relationships with Prologis’ global platform, operating expertise and financial strength.”

The agreement follows several approaches from Prologis, including proposals rejected by Segro on valuation grounds. The final terms represent a 39% premium to Segro’s closing share price on 23 June, before the US group’s takeover interest became public.

Completion is expected during the first half of 2027, subject to approval from Segro shareholders, court sanction, regulatory clearances, and other customary conditions. Prologis shareholders will not vote on the transaction.

Prologis intends to seek a secondary listing of its shares on the London Stock Exchange as a condition of completion. That would give Segro shareholders a London-traded route to retain exposure to the enlarged company, although the transaction will remove one of the UK market’s largest specialist real estate investment trusts as an independent listing.

The combined business would have approximately $269bn of assets under management. Its European operating portfolio would cover 368m square feet, increasing Prologis’s presence in the region by 47%, while its European development pipeline would reach 13m square feet. The deal would also more than double its European land bank.

Segro owns large logistics parks, urban warehouses, and industrial property across the UK and continental Europe. Many of the assets are close to population centres, transport routes, and business clusters where land availability is limited and replacement costs are high.

Warehouse demand accelerated during the expansion of ecommerce, but occupiers and property owners have since faced higher financing costs, slower economic growth, and more selective investment markets. Continued investment in data centres, automation, and more regionalised supply chains has sustained demand for well-located logistics and industrial space.

The acquisition would add Segro’s European operating platform and customer relationships to Prologis’s global network. Prologis said the enlarged group would also have broader opportunities across logistics, energy, and digital infrastructure, including the provision of power and related services across industrial sites.

In the first full year after completion, and assuming annualised run-rate synergies, Prologis expects the transaction to be broadly neutral or minimally dilutive to core funds from operations and adjusted funds from operations per share. It also expects to retain its current A2 and A credit ratings from Moody’s and S&P respectively.

The transaction extends the pattern of overseas approaches, take-privates, and strategic consolidation identified across June’s UK M&A market. Public valuations have not always reflected the prices international buyers are prepared to pay for established British assets and operating platforms.

The agreed terms end the uncertainty surrounding Prologis’s approach, but the outcome still depends on shareholders, regulators, and the court. Until those conditions are met, Segro will continue to operate as an independent listed company.