Industrial Midwest

AMB and ProLogis close merger

AMB Property Corporation and ProLogis announced on June 3, the completion of their merger, forming a combined company named Prologis, Inc., a leading global owner, operator and developer of industrial real estate. The common stock of the combined company began trading under the symbol PLD on the New York Stock Exchange on Friday.

AMB Property Corporation and ProLogis  announced on June 3, the completion of their merger, forming a combined company named Prologis, Inc., a leading global owner, operator and developer of industrial real estate. The common stock of the combined company began trading under the symbol PLD on the New York Stock Exchange on Friday.

"This merger brings together two great organizations to form an even stronger global industrial real estate company," said Hamid R. Moghadam, chairman and co-CE, in a release. "We are excited to move forward with a clear strategy to pursue growth opportunities around the world with our high-quality portfolio of logistics properties, proven private capital business, financial strength and our talented team."

"Prologis is poised for a bright future," said Walter C. Rakowich, co-CEO. "With an unmatched global network, an excellent board of directors and a strong management team, 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."

Transaction Information

As a result of the merger, each former ProLogis common share has been converted into the right to receive 0.4464 of a newly issued share of the combined company's common stock. Each share of AMB common stock will remain 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.

Accretion / Cost Savings

The transaction will create synergies and be immediately accretive, with the full expected annual gross savings of approximately $80 million in G&A to be realized by the end of 2012. The company anticipates it will have an improved cost of capital with greater financial flexibility and that its expanded footprint will generate increased revenue opportunities by allowing it to better serve the needs of its customers.

Leadership and Operations

Moghadam, AMB's former CEO, and Rakowich, ProLogis' former CEO, 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.

The company's corporate headquarters will be in San Francisco, and the company's operations headquarters will be in Denver. The combined company is structured as an UPREIT.

Board of Directors

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.

Advisors

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.