Warehouse giant Tritax Big Box has struck a deal to buy rival UK Commercial Property REIT (UKCM) for £924 million.
The combination of the two firms is set to make a real estate giant worth almost £4 billion.
It came after reports over the weekend by industry title React that Tritax Big Box had made an “indicative proposal” for an all-share merger between the London-listed rivals.
Tritax owns dozens of large warehouses, typically found near motorways, and has major tenants including Ocado, Amazon and B&Q.
UKCM, which is the much smaller of the two companies, has a portfolio investing in shopping centres, office buildings and distribution centres.
Bosses at Tritax said the deal will bring together a real estate portfolio worth around £6.3 billion focused on the logistics sector.
It said the deal will value UKCM at 71.1p per share, which Tritax said represents a 10.8% premium on its rival’s share price at the end of trading on Friday.
Tritax told shareholders the move will “bring together complementary logistics-oriented investment portfolios with a shared focus on resilient and growing income”.
It said it will also “enhance the overall customer offering through a high-quality logistics portfolio across a broader range of property sizes and tenant uses, from ‘Mega-Boxes’ to smaller, strategically located, logistics assets within key urban locations.”
Shares in UKCM lifted 4.7% in early trading on Monday, while Tritax was trading 2.1% lower.