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Prologis Acquires DCT Industrial Trust for $ 8.4 Billion

Prologis Inc. agreed to take over $ 8.4 billion in DCT Industrial Trust Inc.'s shares and debts, making the world's largest stockholder even larger as demand in the online age -Shoppings goes up.

For each of them they receive 1.02 Prologis shares, it said on Sunday in a statement. This equates to a premium of around 16 percent over the DCT closing price of $ 58.75 on Friday. The directors of Proltis in San Francisco and DCT in Denver agreed to the purchase, which should be completed in the third quarter, the companies said.

DCT has 71

million square feet (6.6 million square feet) of real estate, which will help Prologis deepen its presence in high-growth markets such as Southern California, the San Francisco Bay Area, Seattle, South Florida and New York and New Jersey. These are the places where the greatest demand has been for storage space and logistics services, mainly thanks to e-commerce.

"DCT markets are 100 percent aligned with our markets," said Hamid Moghadam, CEO of Prologis. "The portfolios are perfectly aligned – imagine DCT as a smaller US-focused version of Prologis – in the US, we're very similar – the same customers, the same customers in many cases."

Real Estate Investment Trusts specializing in industrial properties have outperformed REITs with a focus on shopping centers, rental apartments and office buildings. Shopping at Amazon.com Inc. and other Internet retailers still account for less than 10 percent of US retail sales, but it reconfigures supply chains and shapes the fate of warehouse owners. Demand is particularly in demand in and around large cities, where the on-line purchase cuts off the fastest.

"Many of our customers are not only busy with transporting pallets to shops, but also directly to consumers," said Phil Hawkins, CEO of DCT in an interview. "To be in this business you need to be in the right markets where consumers live and be close, and the efficiency of the e-commerce supply chain requires both location and functionality."

DCT and Prologis have been competing to improve e-commerce services for their tenants, often in warehouses literally right next to each other, Hawkins said. He will serve on the combined company's executive board while most DCT executives will go, Hawkins said.

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