Vonovia and Deutsche Wohnen combine to develop a huge landlord thumbnail

ROLF BUCH, president of Vonovia, Germany’s biggest residential-property company, says he has learned a lot given that he tried and failed to purchase Deutsche Wohnen (DW), the second-biggest, in2015 At That Time Mr Buch’s hostile bid was an attempt to avoid DW from integrating with third-ranked LEG. Neither deal occurred.
On May 24 th Vonovia stated it is having another go, with the acquiescence of DW’s management. “This time we will do much better,” Mr Buch promises. If the EUR18 bn ($22 bn) all-cash offer wins the approval of DW’s shareholders, it will create without a doubt the greatest residential-property firm in Europe.

The duo’s combined market capitalisation is EUR45 bn. The bigger Vonovia will handle 550,000 flats in all big German cities with a total worth of some EUR90 bn. Mr Buch and DW’s employer, Michael Zahn, who will become his deputy, say it would save EUR105 m each year in expenses, thanks to less expensive sourcing of materials and other economies of scale, and free up cash for investment in things like better insulation, assisting to satisfy Vonovia’s goal of making all its buildings practically carbon-neutral by2050
Mergers between members of the DAX 30 index of Germany’s bluest chips are rare– and primarily, like the takeover in 2001 of Dresdner Bank by Allianz, a huge insurance provider, ill-starred. They tend to be consulted with fierce opposition from unions …
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