Property developer Segro has confirmed it will acquire Tritax EuroBox in a deal worth £552m.

The board of Tritax EuroBox, which specialises in investments in distribution centres across Europe, has recommended the transaction to its shareholders.

Both firms have reached an agreement on the terms of a recommended all-share offer by Segro for the entire issued and to be issued share capital of Tritax EuroBox. The deal values each Tritax EuroBox share at 68.4p.

Segro chief executive, David Sleath, said that the transaction offers the opportunity to acquire a “high-quality portfolio of big box warehouses in core European markets”, which would complement and enhance the group’s existing assets.

“The management of the portfolio will be internalised on completion, taking advantage of economies of scale from our existing, locally based operating platform,” added Sleath.

“We intend to apply the long-established Segro strategy of disciplined capital allocation and operational excellence, based on an efficient and resilient corporate and capital structure and the responsible Segro principles as we do for all assets we own and manage.

“While shareholders can expect this approach to lead to some capital recycling, we recognise the high quality of the portfolio assembled by the manager and look forward to working with it for the benefit of our new and existing shareholders.”

The chair of Tritax EuroBox, Robert Orr, added that the deal represents a “compelling” opportunity for Tritax EuroBox shareholders to achieve a “significant and immediate uplift” in the value of their investment and stronger total shareholder returns.

“[It has] the option either to retain exposure to the European industrial and logistics sector through holding shares in the largest and most liquid REIT in Europe, or to sell their new Segro shares for cash, taking advantage of Segro’s significantly greater trading liquidity,” Orr said.

“The board is pleased to recommend the Transaction to Tritax EuroBox shareholders.”

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