Wachtell and Hogan Lovells lead on $26bn deal for Prologis to buy Duke Realty

Alston & Bird and Fried Frank also secure roles as all-stock deal follows previous unsuccessful $24bn bid in May

Wachtell Rosen Lipton & Katz, Hogan Lovells, Alston & Bird and Fried Frank are advising on real estate investment trust Prologis’ takeover of rival warehouse operator Duke Realty in an all-stock deal worth $26bn. 

Once finalised, Duke Realty shareholders will receive 0.475 of a Prologis share for each Duke Realty share they own. The transaction is expected to close in the fourth quarter of the year, according to a statement. 

By acquiring Indiana-based Duke Realty, Prologis will gain 153 million square feet of operating properties across major logistics geographies including Southern California, New Jersey, Florida, Chicago, Dallas and Atlanta. 

Prologis is being advised by Wachtell, while Hogan Lovells and Alston & Bird are advising Duke Realty. Fried Frank is acting as legal adviser to Prologis’ financial adviser, Goldman Sachs. 

Watchell’s team is being led by corporate partners Adam Emmerich and Viktor Sapezhnikov, compensation and benefits partner Erica Bonnett, finance partner Emily Johnson, real estate partner Robin Panovka and tax partner Joshua Homes. The firm previously worked on Prologis’ 2019 acquisition of Liberty Property Trust for $12.6bn. 

Hogan Lovells’ team, meanwhile, is led by David Bonser, global managing partner of the firm’s corporate practice and global head of its real estate investment trust practice, and corporate and finance partner Stacey McEvoy. 

The team also includes corporate partner Paul Manca, tax partners Christina Arumi and Jasper Howard, employee benefits and compensation partner Martha Steinman and capital markets partners Tiffany Posil and Abigail Smith. 

Prologis, which acts as one of Amazon’s major landlords, currently owns or has investments in one billion square feet worth of properties and development projects in 19 countries. The company is based in San Francisco, where it was founded in 1983. 

Prologis co-founder, CEO and chairman Hamid Moghadam commented: “We have admired the disciplined repositioning strategy the Duke Realty team has completed over the last decade. They have built an exceptional portfolio in the US located in geographies we believe will outperform in the future.” 

The company said it projects the deal to create immediate accretion of between $310-370m from corporate and administrative cost savings and operating leverage, as well as mark-to market adjustments on leases and debt. Prologis plans to hold around 94% of the Duke Realty assets and exit one market upon completion of the deal. 

Prologis first bid for Duke Realty in May with a $24b offer which Duke Realty rejected.

Jim Connor, Duke Realty’s chairman and CEO, said: “We have always respected Prologis, and after a deliberate and comprehensive evaluation of the transaction and the improved offer, we are excited to bring together our two complementary businesses.”

In February, Simpson Thacher & Bartlett was revealed to be advising longtime client Blackstone on the recapitalisation of European warehouse giant Mileway in what was deemed the largest private real estate transaction ever.

The mammoth deal underlined the private equity firm’s confidence in its last-line delivery as demand from consumers for same-day delivery continues to increase, driven by the Covid-19 pandemic. 

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