German residential property company Vonovia to buy Austrian rival Conwert for €2.9 bn

German residential property company Vonovia SE yesterday struck a deal to buy its smaller Austrian rival Conwert for around €2.9 billion ($3.2 billion) including debt.

Vonovia, Germany's largest real estate company, is offering to pay 74 of its own shares for every 149 Conwert shares, which equates to €17.58 per share.

The deal values Conwert's equity at €1.7 billion, but the total deal is worth around €2.9 billion including debt.

Alternatively, Conwert shareholders can opt to receive €16.16 per share in cash. Conwert's shares closed at €16.15 on Friday.

Vonovia expects that the merger would generate annual synergies of around €12 million by the end of 2018.

The deal comes six months after Vonovia ended a failed four-month takeover battle to acquire Deutsche Wohnen AG and Conwert last year rejected a €980 million takeover bid from Deutsche Wohnen.

Vonovia, which has 340,000 homes in Germany, said that the Conwert deal further strengthens its market position in attractive regions in Germany.

Vonovia also said that the deal would create a group with 367,000 flats, and give it properties in the developing German city of Leipzig as well as in Berlin, Potsdam, Dresden and the Austrian capital Vienna.

Post closing, Conwert would continue to be headquartered in Vienna, and would also continue to be listed on the Austrian stock exchange.