German real estate is seeing a wave of mergers and acquisitions rise with low interest rates offering investors an open window for growth.
Mergers and acquisitions are on the rise in Germany's real estate segment as industry players look to capitalize on low interest rates and a virtual standstill in property prices. Unlike neighboring countries who are experiencing unsteady growth rates. In a report by Gulf News, Vonivia, the top dog of real estate joined the fray and revealed plans of offering €14 billion or $16 billion for its nemesis Deutsche Wohnen after its failed bid to acquire LEG Immobilien.
According to the same report, Deutsche Wohnen did not accept the offer and even called it "uninteresting and inappropriate." The company is keen on pushing through with its merger with LEG that has a price tag of €5 billion. However, shareholders have yet to give the green light on the deal with many of them worried that the price may be too much for their comfort. The bidding war for this merger is by far the biggest in the country's real estate industry which has seen a spate of mergers and acquisitions in the last few months.
Vonovia which used to be called Deutsche Annington has began its campaign of gobbling competition at the start of the year by acquiring Gagfah and Suedewo for roughly €6 billion. This increased their portfolio of residences to 370,000 scattered all over Germany.
In a report by NY Times, Vonovia is said to be serious in its plan stop the planned merger of Deutsche Wohnen and LEG because it would become a much bigger competitor to them in the future. The shareholders of Deutsche Wohnen will be asked to put the deal to vote on whether it is good for the company or not before Oct. 28.
