FRANKFURT (Reuters) - Germany's biggest real estate firm Deutsche Annington (>> Deutsche Annington Immobilien SE) on Friday launched its public offer for third-ranked rival Gagfah (>> Gagfah S.A.) in a 3.9 billion euro (£3 billion) cash and shares deal.

Gagfah shareholders can tender their shares until January 2015, Deutsche Annington said in a statement, adding the minimum acceptance level lies at 57 percent of all outstanding Gagfah shares.

The deal is set to create Europe's second largest real estate company after France's Unibail-Rodamco (>> UNIBAIL-RODAMCO) with some 350,000 flats and a portfolio totalling 21 billion euros, Deutsche Annington had said earlier this month.

(Reporting by Arno Schuetze; editing by Harro ten Wolde)