ProLogis, AMB ink definitive agreement to pave way for merger

Following speculation that global industrial real estate bellwethers ProLogis and AMB Property Corporation were planning to merge, the companies announced today that they have joined hands in inking a definitive agreement through what that described as a “merger of equals.”

Latest News

State of Logistics 2016: Pursue mutual benefit
The 2016 3PL CEO Survey: Growth, but headwinds to come
California’s ports may face new political pressures during “Peak Season”
CEMA forecasts 7.5% growth in conveyor industry for 2017
Schneider National officially rolls out IPO
More News

Latest Resource

The View from the New “Single Window”
The single window, officially known as the "International Trade Data System," operates via the Customs and Border Protection (CBP) agency's Automated Commercial Environment (ACE) platform, and serves as a single point of contact for all trade filings.
All Resources
By ·

Following speculation that global industrial real estate bellwethers ProLogis and AMB Property Corporation were planning to merge, the companies announced today that they have joined hands in inking a definitive agreement through what that described as a “merger of equals.”

ProLogis is a global provider of distribution facilities, with more than 475 million square feet of industrial space throughout North America, Europe, and Asia. And AMB is an owner, operator and developer of global industrial real estate, with a focus on major hub and gateway distribution markets in the Americas, Europe, and Asia. The company owns or has investments in various properties and development projects comprised of 159.6 million square feet.

Officials at the companies said the new entity will have assets owned and under management of roughly $46 billion and market capitalization or more than $24 billion. They added that this all-stock merger, with each ProLogis common share converted into 0.4464 of a newly-issued AMB common share, is expected to close during the second quarter, with the new company named ProLogis.

Roughly 40 percent of the company’s ownership is held by AMB shareholders, with 60 percent held by former ProLogis shareholders.

They added that the combined portfolios of these companies represents roughly 600 million square feet of “modern distribution facilities located in key gateway markets and logistics corridors in 22 countries,” with both companies having major portfolios in North America, Western Europe, and Japan, while ProLogis has a major presence in the United Kingdom and Central and Eastern Europe, and AMB having a major presence in China and Brazil.

“What is unique about this company is that it is a leader in the world of industrial real estate across many dimensions,” said Hamid R. Moghadam, AMB CEO, on a conference call. “What is less obvious is that we are building the best customer franchise in the real estate industry. We are the only industrial real estate player that is going to be active on four continents and are clearly the leasing industrial developer around the globe, and we have a leading investment management franchise.”

The company’s headquarters will be in San Francisco, and it will have a major presence in Denver, where ProLogis is based, which will serve as the company’s global operational headquarters. Moghadam said that the new entity will result in roughly $80 million in annual savings by the second half of 2012.

“There are some compelling benefits to this combination,” said Walter C. Rakowich, ProLogis, CEO, on the call. “We will have a world-class platform with complimentary businesses in North America, Europe, and Japan and also China and Brazil. “The offerings that we expect to give to our customers will be second to none. And we are going to be in a great position to offer our private capital partners a wide range of industrial funds, both geographically and from an investment return perspective.

A company statement explained that Moghadam, AMB’s CEO, and Rakowich, ProLogis’ CEO, will serve as co-CEOs through December 31, 2012, at which time Rakowich will retire, and Moghadam will become sole CEO of the combined company.  Moghadam also will be Chairman of the Board of the combined company and will be primarily responsible for shaping the company’s vision, strategy and private capital franchise. Rakowich will be principally responsible for operations, integration of the two platforms and optimizing the merger synergies. Until December 31, 2012, Rakowich also will serve as Chairman of the Board’s executive committee. The statement added that William E. Sullivan, current ProLogis CFO, will continue to serve as CFO and will retire from ProLogis on December 31, 2012, and during this period, Thomas S. Olinger, AMB’s current CFO, will be responsible for day-to-day integration activities and report to the CEOs; he will become the CFO of the combined company on December 31, 2012. 

A Wall Street Journal report noted that in late 2008 ProLogis was dealing with debt problems and faced the possibility of bankruptcy. But citing a “quicker-than-expected rebound in the capital markets for commercial real estate,” it said that ProLogis was able to sell enough stock and assets over the last two years to avert that possibility.

What’s more the WSJ report pointed to the U.S. warehousing market showing some signs of life due to a pickup in global trade, but it cautioned that a difficult recovery is still likely, with the national availability rate for industrial real estate dropping 0.3 percentage points in the fourth quarter, according to CB Richard Ellis Group data.

Top 20 warehouses: Forecast brightens for 3PL and public refrigerated warehouses
It was a difficult year in the warehousing arena; new construction ground to a halt and revenues were down. But, it looks like we’ve turned the corner and the outlook is bright.


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
The View from the New “Single Window”
The single window, officially known as the "International Trade Data System," operates via the Customs and Border Protection (CBP) agency's Automated Commercial Environment (ACE) platform, and serves as a single point of contact for all trade filings.
Download Today!
From the March 2017 Issue
WMS vendors are stepping up to the plate and developing functionalities and solutions that meet the complex needs of today’s companies. Our top analysts take a peek into these developments and discuss the DC of the future and the software that will support it.
5 Supply Chain Trends Happening Now
2017 Warehouse/DC Equipment Survey: Investment up as service pressures rise
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
2017 Trucking Regulations & Infrastructure Update
In this session our panel brings shippers up to date on the state of transportation regulations. Discussion will revolve around regulatory reform, aspects of the federal highway bill and what the transportation landscape looks like in the early days of the Trump administration.
Register Today!
EDITORS' PICKS
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...
ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...

2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...
Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...