French office REITs Société de la Tour Eiffel (STE) and Affine have signed an agreement to merge their businesses and create a €1.7 bn office property group.
The operation is set to take the form of a merger-absorption of Affine by STE on the basis of an exchange ratio of one new STE share for three Affine shares, or a small premium to both STE and Affine EPRA NAV per share on 2018 H1.
The companies' shareholders are due to vote on the merger in December 2018.
The group will have a market capitalisation close to €750 mln and an increased free float of €100 mln, or 14% of the share capital after the merger.
In a statement, Affine said that the new combine will have 'stronger geographic positions in the Greater Paris Area and in large regional cities'. The portfolio will include 163 assets, 75% of which are located in the Greater Paris area.
The move follows a change in management at both companies. In April Affine announced the promotion of deputy CEO Matthieu Evrard as new head of the company following the resignation of Alain Chaussard, who led the company for the past 20 years.
Last month STE appointed former Bouygues director Thomas Georgeon as new CEO with a three-year term.
