A huge European property company merger is shaping up.
The Spanish firm Metrovacesa says it plans to buy France’s Gecina. The total price is around 5.5 half billion euros. Madrid-based Metrovacesa has already bought 30% of the French company and has launched a bid for the rest. The acquisition gives it a foothold in key French business segments, particularly the coveted office rental market in Paris. It would be the biggest ever European deal in this sector and would make Metrovacesa the largest property company in the euro zone, if all shareholders accept the bid. The combined entity would have 13.6 billion euros in assets and 1.4 billion euros in annual revenue. Spanish companies have grown rapidly thanks to a long-term building boom there, though that is now showing signs of slowing down. French property firms have become more attractive takeover targets since France brought in tax breaks so that investors are assured higher dividends on their shares. Metrovacesa’s Chairman, Joaquin Rivero, earlier this month announced plans to spend as much as seven billion euros on acquisitions in countries including France. This purchase will be financed by a seven-year loan, and Metrovacesa plans to then cut its debt by selling assets and issuing 800 million euros worth of new shares.