In a significant development in the mergers and acquisitions landscape, Segro, a leading UK warehouse landlord, has reversed its earlier stance and is now poised to endorse a £14 billion acquisition bid from American rival Prologis. This deal, if finalised, would mark one of the largest foreign takeovers of a UK-listed company, highlighting ongoing interest in British assets amidst challenging market conditions.
Segro’s Board Unanimously Recommends Acceptance
The Segro board announced its unanimous decision to recommend that shareholders accept Prologis’s latest offer, which was presented just before a crucial deadline. This announcement, made on 22 July 2026 after the stock market’s close, follows a series of rejections of previous bids from Prologis, including an initial £12.6 billion proposal. The revised offer includes 0.092 new Prologis shares for each Segro share, valuing the UK company at £10.32 per share—3.9% higher than its last proposal and a 9.5% increase from the initial bid disclosed in June.
Segro’s management has also stipulated that shareholders will receive a permitted dividend as part of the deal. Furthermore, the board has requested that Prologis establish a secondary listing for Segro on the London Stock Exchange, ensuring continued visibility and access for investors in the UK market.
Extension of the Offer Deadline
Prologis was initially under pressure to confirm its intentions by 5pm on 22 July, under the UK’s takeover code, which sets a “put up or shut up” (PUSU) deadline for potential acquirers. However, this deadline has been extended by three weeks, with Prologis now required to submit a firm offer by 5pm on 12 August. The extension has been welcomed by Prologis, who expressed a readiness to collaborate with Segro’s board to facilitate a successful outcome. Following the announcement, Prologis’s shares experienced a slight decline of up to 3% in New York trading, although they later recovered.
The board’s change of heart came shortly after significant pressure from one of its major stakeholders, Norges Bank Investment Management. Holding an 8.3% stake in Segro and a 1.3% stake in Prologis, Norges advised Segro to engage with the American firm, citing a clear strategic rationale for a merger.
The Evolution of Segro
Founded as the Slough Trading Company in 1920, Segro has evolved significantly from its origins in the Slough area of London. The company, which now operates over 10.9 million square metres of space across Europe, has successfully adapted to changing market demands. Notably, Segro’s Slough trading estate now boasts the second-largest portfolio of datacentres globally, catering to the growing digital infrastructure needs of firms such as Amazon, Netflix, and others.
During the pandemic, Segro’s business thrived as e-commerce surged, leading to increased demand for warehouse space. However, since peaking in early 2022, Segro’s share price has fallen approximately 40%, prompting a reassessment of its strategic position and the potential benefits of aligning with Prologis.
A Broader Context of Foreign Investment
The proposed acquisition of Segro by Prologis reflects a broader trend of rising foreign interest in UK companies, particularly in the real estate sector. Recent geopolitical shifts, including the ongoing Iran conflict, have rendered British stocks more attractive to international investors, as they are perceived as undervalued compared to their US counterparts.
This acquisition comes amid a wave of overseas bids for British businesses, with notable examples including laboratory testing firm Intertek’s acceptance of a £10.6 billion offer from a private equity firm and easyJet’s consideration of a £5.7 billion proposal from US private equity giant Apollo. The landscape suggests a burgeoning appetite for British assets, with companies seeking growth opportunities in a fluctuating global economy.
Why it Matters
The potential acquisition of Segro by Prologis is emblematic of the current state of the UK market, reflecting both the challenges and opportunities within the realm of corporate mergers and acquisitions. This deal not only underscores the attractiveness of British companies to foreign investors but also highlights the pressing need for domestic firms to adapt strategically in a rapidly evolving landscape. As the UK continues to navigate economic uncertainties, the outcome of this acquisition could set a precedent for future foreign investments and reshape the competitive dynamics of the British real estate sector.