Warehouse Giant Prologis to Acquire Rival Liberty for $12.68 Billion

Prologis exterior feature

Warehouse and fulfillment center giant Prologis will acquire rival Liberty Property Trust in an all-stock merger valued at $12.68 billion, the companies announced, greatly expanding Prologis’ U.S. logistics holdings as demand continues to ramp up.

This is in addition to Prologis’ 2018 acquisition of smaller competitor DCT Industrial Trust for $8.4 billion, giving it an additional 71 million square feet of developed space. Prologis and main competitor Blackstone Group have laid out a combined $38 billion in an ecommerce-fueled arms race of acquisitions this year, 40% of it coming in the past month according to Bloomberg.

“Liberty’s logistics assets are highly complementary to our U.S. portfolio and this acquisition increases our holdings and growth potential in several key markets,” said Prologis chairman and CEO Hamid R. Moghadam in a release. “The strategic fit between the portfolios allows us to capture immediate cost and long-term revenue synergies.”

In particular, Prologis gains a presence in several key markets including the Lehigh Valley in Pennsylvania, Chicago, Houston, central Pennsylvania, New Jersey and Southern California.

In total, Prologis gains 107 million square feet of logistics space, 5.1 million square feet of logistics development in progress, 1,684 acres of land for future logistics development with a build-out potential of 19.7 million square feet, and 4.9 million square feet of office operating and development space.

The companies said the merger is expected to create immediate cost savings of about $120 million from among corporate general and administrative, operating leverage, lower interest expenses and lease adjustments.

According to the Philadelphia Business Journal, which broke the story, Liberty had been working over the past decade to become an industrial REIT focused on owning and developing distribution centers across the country. It was ahead of its time in identifying the potential of the coming explosion in ecommerce and investing in properties accordingly.

Prologis’s customers include Amazon, Walmart, FedEx, UPS, Home Depot and major 3PLs including XPO Logistics, Kuehne & Nagel, Geodis and Ingram Micro. Last month, Prologis announced Amazon and Home Depot as tenants in a new state-of-the-art three-story warehouse and fulfillment center in Seattle.

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