SAN FRANCISCO AND DENVER — After stockholders of both companies approved on June 1, San Francisco-based AMB Property Corporation (NYSE: AMB) and Denver-based ProLogis (NYSE: PLD), completed their merger, for which a definitive agreement was signed on January 31, 2011.
Upon completion of the merger, the two companies combined to form the publicly traded Prologis, Inc. The common stock of the combined company is now trading under the symbol PLD on the New York Stock Exchange as of Friday, June 3. The company's corporate headquarters are in San Francisco, and the company's operations headquarters are in Denver. Prologis, Inc. is structured as an UPREIT.
More than 498 million, or 87.4 percent, of ProLogis' outstanding shares were voted, with approximately 99.6 percent of those voted in favor of the merger proposal. With the merger now in effect, each ProLogis common share has been exchanged into 0.4464 of a newly issued common share of AMB, while each share of AMB common stock remains as one share of the combined company's common stock. Former ProLogis common equity holders hold approximately 60 percent of the combined company's common stock, and former AMB common equity holders hold approximately 40 percent.
The combined company boasts more than 600 million square feet of modern distribution facilities owned and managed in 22 countries. The company is expected to have a pro forma equity market cap of approximately $15.7 billion.
“This merger brings together two great organizations to form an even stronger global industrial real estate company,” said Hamid R. Moghadam, chairman and co-CEO. “We are excited to move forward with a clear strategy to pursue growth opportunities around the world.”
“Prologis is poised for a bright future,” said Walter C. Rakowich, co-CEO. “We are primed to deliver on the promise of great products and service for our customers, career opportunities for our people and sector-leading returns for our stockholders.”
A video of Moghadam and Rakowich commenting on the merger can be found here.
Moghadam and Rakowich will serve as co-CEOs of the combined company through December 31, 2012, at which time Rakowich will retire and Moghadam will become sole CEO. Until then, Moghadam will focus on shaping the company's vision, strategy and private capital franchise, and Rakowich will focus on operations, specifically the integration of the two platforms and the optimization of merger synergies. In addition, Moghadam will be chairman of the Board and Rakowich will serve as chairman of the Board's executive committee.
Besides Moghadam and Rakowich, the members of the Board of Directors include: Lydia H. Kennard, J. Michael Losh, Jeffrey L. Skelton and Carl B. Webb, former members of the board of directors of AMB; and George L. Fotiades, Christine N. Garvey, Irving F. Lyons III, D. Michael Steuert and William D. Zollars, former members of the board of trustees of ProLogis. Irving F. Lyons III will serve as lead independent director.
The transaction creates expected annual gross savings of approximately $80 million in G&A to be realized by the end of 2012. The company anticipates an improved cost of capital with greater financial flexibility and that its expanded footprint will generate increased revenue opportunities.
Morgan Stanley acted as financial advisor to ProLogis, and Greenberg Traurig and Mayer Brown acted as legal advisors to ProLogis. J.P. Morgan Securities LLC acted as financial advisor to AMB, and Wachtell, Lipton, Rosen & Katz acted as legal advisor to AMB.
— Dan Marcec