Major German housing merger

Deutsche Wohnen was offering 51 of its own shares for 20 shares in GSW, the Frankfurt-based housing company, announced Tuesday.

The deal was not negotiable, and needed the approval of 75 percent of GSW shareholders to go through, Deutsche Wohnen said.

“The goal of the takeover is to create a leading German residential real estate company, to achieve synergies and to enhance operative performance as a consequence of the merger," the firm added.

The two companies will have a combined real estate portfolio of 8.5 billion euros ($11.8 billion), made up of about 150,000 housing units mainly in Berlin and the financial city of Frankfurt.

The merger is estimated to cost Deutsche Wohnen about 1.7 billion euros worth of its own shares, and will create the second biggest German housing company after Deutsche Annington.

GSW's management hasn't commented on the bid, instead appearing surprised by the offer. The two companies repeatedly discussed a merger in recent years, but the talks were said to have been inconclusive with regard to a possible tie-up.

Both groups are listed on the Frankfurt stock exchange, where GSW stocks jumped about 10 percent on Tuesday.

Georg Kanders, analyst with Bankhaus Lampe, told Reuters news agency the merger would fit and the offer was well-timed because a counter-bid wasn't to be expected.

uhe/dr (Reuters, AFP, dpa)