Warehouse giant Prologis has agreed to buy its rival Duke Realty in an all-stock deal valued at $26 billion including debt.
The deal comes after Duke Realty denied Prologis’ previous offer of $24 billion stating that it was insufficient. Unfortunately for both companies, stock prices have been dropping in recent months with Duke Realty dropping 24% this year and Prologis dropping over 30%.
The drop in stock price comes as e-commerce sales have dropped since the height of the pandemic. Even Amazon has stated that it is looking to sublease over 10 million square feet of warehouse space due to decreased demand. In addition to this, many supermarkets such as Target and Walmart have been exploring ways in which they could turn part of their stores into mini fulfillment centers further reducing the need for warehouse space among companies like Amazon.
Prologis owns roughly 1 billion square feet of warehouse space across the U.S. and leases that much of that space to companies like Amazon and Home Depot. Prologis has stated that the acquisition will allow the company to gain real estate in key areas such as Southern California, Southern Florida, Chicago, Dallas, and Atlanta.