Germany’s two largest residential real estate groups, which are under public pressure to limit rent increases, will join forces in a $ 22 billion deal.
Vonovia and Deutsche Wohnen have approved the pact, which, according to MarketWatch, would value their real estate holdings at a total of 110 billion US dollars.
Vonovia would buy the shares in Deutsche Wohnen for 53.03 euros per share. That would be a premium of 18 percent on the Deutsche Wohnen share price on Friday. The price closed on Monday at EUR 52.06 per share.
The companies said that managing their portfolios together is projected to save approximately $ 128 million annually in costs. Vonovia CEO Rolf Buch said the merger would help companies bring residential units in Berlin to new energy efficiency standards, the report said.
Both companies recently pledged to limit rent increases to 1 percent in the German capital, where residents have urged them to do so. After a public campaign in 2019, Deutsche Wohnen announced that it would sell 20,000 units to the city.
Deutsche Wohnen’s CFO Philip Grosse said in 2019 that Berlin’s pioneering rent freeze posed a threat to the company’s finances and that other markets would be looking for new properties.
The Berlin Rent Control Act was put down in a German court earlier this year.
[MW] – – Dennis Lynch