The listed residential property sector in Germany is being driven by mergers and acquisitions rather than portfolio acquisitions, with Vonovia, the undisputed giant of the pack, leading the charge.
And, for the time being at least, there doesn’t appear to be any challenger in sight to rival Vonovia in terms of firepower and the ability to get M&A deals across the line. Moreover, Vonovia is not shy about using its muscle to derail alliances planned by its peers.
The latest example of Vonovia's prowess came in September when its management board revealed it had signed an agreement with Conwert Immobilien’s board to acquire all shares in the Vienna-listed company. That represents a premium of 23.8%, based on the average price of Conwert shares in the last six months of €14.20 per share.
Alternatively, Vonovia will offer Conwert shareholders €16.16 per share in cash. Vonovia, owner of 360,000 homes, said Conwert's 24,500 units will allow the combined group to expand its footprint in Leipzig, Berlin, Potsdam and Dresden, as well as the Austrian capital Vienna.
The agreement was probably not met with as much enthusiasm by Deutsche Wohnen (DW). The number two in the residential sector with 157,600 units also had its eye on the Austrian company, but last April Conwert's shareholders rejected DW's €1.2 bn offer. DW's subsequent attempt to buy LEG Immobilien, the number 3 in the German sector, in a €4.6 bn share deal was stymied by Vonovia floating a €14 bn offer for DW. In the end neither deal went ahead, and a Vonovia-Conwert combination will make an existing giant even bigger.