By Liza Helps, Property Editor, Logistics Matters

THE COMPETITION and Markets Authority (CMA) is seeking views on the anticipated acquisition by Prologis, of SEGRO a FTSE listed plc and has today issued an ‘invitation to comment’ to allow interested parties to submit to the CMA any initial views on the impact that the transaction could have on competition in the UK.

The CMA has not yet launched its formal investigation into this transaction. This invitation to comment is the first part of the CMA’s information-gathering process.

FTSE listed UK Real Estate Investment Trust and one of the nation’s largest industrial  property developers SEGRO agreed the £14.3billion take-over offer from US rival Prologis in August this year after  months of wrangling following an unsolicited all-share takeover proposal in June.

SEGRO initially rejected the proposal as opportunistic and undervaluing the business but cam to an agreement ollowing further discussions and an improved proposal.

The merger was set to be completed in the first half of next year subject to shareholder approval and will create a company with a European operating portfolio of approximately 368 million ft2.

Prologis has invested in the UK and Europe, building a business with £28 billion of AUM since 1997. Over the past 28 years, Prologis has built a portfolio spanning 251 million ft2 across 12 countries and 50 markets in the region. Prologis is a significant long-term investor to the UK economy, having invested £5.6 billion of capital over the past decade with a further £5.5 billion publicly committed.

Currently SEGRO, is the UK’s largest Real Estate Investment Trust, and owns and manages approximately 27 million ft2 of lettable warehouse and industrial space across the UK. In total it manages properties worth around £22 billion. 

Prologis owns and manages approximately 35.3 million ft2 of logistics warehouse space across the UK, spanning 207 buildings.

Combined they would have 62.2 million ft2 of warehouse space in the UK – the vast majority Grade A space. Rough calculations based on total Grade A space of 465 million ft2 nationwide – means the merger could see one investor developer company controlling some 13% plus of all Grade A industrial and logistics space in the UK not including future space under construction, already in the pipeline, or land controlled or under option to be developed.