Prologis, L.P. entered into an agreement and plan of merger to acquire Liberty Property Trust (NYSE:LPT) from Land and Buildings Investment Management, LLC, The Vanguard Group, Inc., BlackRock, Inc. (NYSE:BLK), State Street Corporation (NYSE:STT) and other shareholders for $9.7 billion on October 27, 2019. Under the terms of the agreement, Liberty shareholders will receive 0.675 of a Prologis, Inc. share for each Liberty share they own. Each Liberty Property Limited Partnership Preferred Unit that is issued and outstanding shall automatically be converted into one new validly issued limited partnership interest in Prologis, L.P. to be designated as a “6.25% Class B Cumulative Redeemable Preferred Partnership Unit”. If the deal closes, Prologis plans to dispose of $2.8 billion of non-strategic logistics properties and $700 million of office buildings. Upon completion of the transaction, former Liberty's shareholders will own approximately 14% stake in then outstanding Prologis, Inc. shareholding. In case of termination under specified circumstances, Liberty Property may be required to pay to Prologis a termination fee of $325 million or reimburse Prologis's transaction expenses up to an amount equal to $15 million. However, the termination fee payable by Liberty Property to Prologis will be $150 million if the agreement is terminated before the end of the window period end time.

Upon closing, each of the officers and trustees of Liberty Property shall resign to ensure that persons designated by Prologis shall be elected as officers and/or trustees of Liberty Property. There will be no change to the current members of the Prologis board or executive officers as a result of the transaction. Hamid R. Moghadam will continue to serve as Chief Executive Officer and Chairman of the combined company. The transaction is subject to the approval of two-thirds of shareholders of Liberty, approval of the consideration shares for listing on the New York Stock Exchange, the Form S-4 to be filed by Prologis in connection with the merger agreement being declared effective and other customary closing conditions. The Board of Directors of Prologis and the Board of trustees of Liberty have each unanimously approved the transaction. The acquisition does not require approval of shareholders of Prologis. As of November 26, 2019, Liberty will hold a special meeting of its shareholders to vote on a proposal to approve the merger. Registration statement of Prologis on Form S-4 declared effective by the SEC on December 20, 2019. As of January 30, 2020, the transaction was approved by Liberty's shareholders. The transaction was previously expected to close in the first quarter of 2020 while as of January 23, 2020, closing was expected in early February 2020. As of January 30, 2020, upon approval from Liberty's shareholders, the transaction is currently expected to close on or around February 4, 2020. This transaction is anticipated to create immediate cost synergies of approximately $120 million from corporate general and administrative cost savings, operating leverage, lower interest expense and lease adjustments. Initially, this transaction is expected to increase annual core funds from operations (Core FFO) per share by $0.10-$0.12. Upon stabilization of the acquired development assets, completion of the planned non-strategic asset sales and redeployment of the related proceeds, annual stabilized Core FFO per share is forecasted to increase by an additional $0.04 per share for a total of $0.14-$0.16. Further, there are future synergies with the potential to generate approximately $60 million in annual savings, including $10 million from revenue synergies and $50 million from incremental development value creation. Due to the impact of non-cash real estate depreciation, Prologis expects the acquisition to be dilutive to net earnings.

BofA Securities and Morgan Stanley acted as financial advisors and Adam O. Emmerich, Robin Panovka, Viktor Sapezhnikov, Andrea K. Wahlquist, Emily D. Johnson and Joshua M. Holmes of Wachtell, Lipton, Rosen & Katz and Mayer Brown LLP acted as legal advisors to Prologis. Goldman Sachs & Co. LLC and Citigroup Global Markets Inc. acted as financial advisors and provided fairness opinion to Liberty. Richard B. Aldridge, Justin W. Chairman, Andrew R. Mariniello, Mims Maynard Zabriskie, Paul Gordon, and Veronica DiCamillo of Morgan, Lewis and Bockius LLP and Cozen O'Connor acted as legal advisors to Liberty. Gibson Dunn & Crutcher LLP acted as legal advisor to Goldman Sachs acting as financial advisor to Liberty. Computershare Trust Company, Inc acted as transfer agent to Prologis. Innisfree M&A Inc. acted as information agent to Liberty and Liberty estimates it will pay Innisfree a fee of approximately $25,000. Liberty engaged Citi with an aggregate fee of $20 million. The engagement letter between Liberty and Goldman Sachs provides for a transaction fee that is estimated, based on the information available as of the date of announcement, at approximately $30 million, all of which is contingent upon consummation of the transaction.

Prologis, L.P. completed the acquisition of Liberty Property Trust (NYSE:LPT) from Land and Buildings Investment Management, LLC, The Vanguard Group, Inc., BlackRock, Inc. (NYSE:BLK), State Street Corporation (NYSE:STT) and other shareholders on February 4, 2020. In connection with the closing of the merger, William P. Hankowsky Chairman of the Board of Trustees, President and Chief Executive Officer; Christopher J. Papa Executive Vice President and Chief Financial Officer; Michael T. Hagan Chief Investment Officer; Shawn Neuman Secretary and General Counsel; Mary Beth Morrissey Chief Accounting Officer; Herman C. Fala Senior Vice President and Senior Legal Advisor; Thomas C. DeLoach, Jr. Trustee; Katherine E. Dietze Trustee; Antonio F. Fernandez. Trustee; Daniel P. Garton Trustee; Robert G. Gifford. Trustee; David L. Lingerfelt. Trustee; Marguerite M. Nader. Trustee; Lawrence D. Raiman and Frederic J. Tomczyk ceased as executive Officers and trustees of Liberty Property Trust. 94 employees of Liberty Property Trust were laid off as a result of the transaction. Liberty Property Trust has closed its headquarters in Wayne as part of the sale.