Two of the world's largest industrial property owners are combining in a £14.3 billion deal that would put roughly $269 billion of logistics real estate under one roof. The case for the merger is scale: a European land bank that more than doubles and a combined 368 million square feet of warehouse space on the continent. What complicates it is that Prologis is paying a 14.4% premium to Segro's most recently reported net asset value, and the deal won't close until at least the first half of 2027.
What the deal pays
The agreed offer values each Segro Plc (LSE: SGRO) share at 1,031.7 pence, payable as 0.0920 newly issued Prologis (NYSE: PLD) shares. That 14.4% premium sits above Segro's most recently reported net asset value of 902 pence per share. Include the proposed 2026 final dividend of up to 22.56 pence, and the blended value reaches 1,054.3 pence per share.
Shareholders who prefer some liquidity can elect an alternative: 258 pence in cash alongside 0.0690 Prologis shares per Segro share held. Up to £3.5 billion, one quarter of the total transaction value, has been set aside for that cash pool. If elections exceed the available funds, allocations will be scaled back proportionally. Prologis said the cash component will be funded through committed borrowing facilities and existing resources.
European footprint after the deal closes
Once complete, the merged group will manage around 368 million square feet of logistics space in Europe, with a development pipeline of roughly 13 million square feet.
Segro shareholders electing shares would hold approximately 8.9% of the combined business, according to Jefferies analyst Sarim Chaudhry. Those shareholders would also remain entitled to Segro's interim dividend of up to 10.14 pence per share. Prologis chief executive Daniel S. Letter said the deal brings Segro's portfolio and customer relationships together with Prologis' global platform and financial strength. Segro chief executive David Sleath called it "a compelling platform" that pairs Segro's assets and future development opportunities with Prologis' global scale and operational capabilities.
The counterargument
The earnings math is thin. Prologis projects little impact on Core FFO and AFFO per share in the first full year after completion, but that forecast rests on operating improvements the company has yet to quantify publicly. Completion is not expected until the first half of 2027, pending Segro shareholder approval, court approval, and regulatory clearance across multiple jurisdictions. Prologis does not need its own shareholder vote, but it plans a secondary listing on the London Stock Exchange before closing, which adds another procedural step to an already long runway.
Prologis says it expects to preserve its current A2/A investment-grade ratings from Moody's and S&P. Whether both agencies share that confidence after reviewing the committed borrowing facilities backstopping the £3.5 billion cash pool is the line to watch before shareholders vote.
Segro's board has unanimously recommended the offer. On balance, the 14.4% premium is fixed; what stays open is whether the projected first-year earnings stability survives the distance between signing and a targeted first-half 2027 close.