Follow U.S. investment immigration and U.S. economic news: On October 23, media reports stated that the two largest real estate investment companies in the United States, American Realty Capital Properties (ARCP) and Cole Real Estate Investments (COLE), announced that they have finalized a merger agreement, completing a transaction valued at approximately $11.2 billion, thereby creating the largest publicly traded real estate investment trust (REIT) in the U.S. net lease industry.
According to the agreement, ARCP will acquire COLE for approximately $7 billion in cash and stock, including COLE's debt, making the total transaction value approximately $11.2 billion.
The merged company of ARCP and COLE will become the largest commercial real estate company in the United States, providing commercial real estate leasing services to clients including Walgreens, Bed Bath & Beyond, and FedEx.
ARCP stated that this acquisition will increase the number of its retail, office, and other properties to 3,732, surpassing the current market leader Realty Income Corp (NYSE: O) with 3,013 properties.
Reports indicate that ARCP has secured $2.75 billion in financing from Barclays for this transaction, which is expected to be completed in the first half of next year after receiving approval from the shareholders of both companies. ARCP also raised its adjusted operating funds for 2014 to between $1.19 and $1.25 per share. The company also stated that it expects to save $70 million in costs in the first year after the transaction is completed.
Barclays and RCS Capital acted as financial advisors for American Realty in this transaction, while Goldman Sachs will serve as the financial advisor for Cole.
It is understood that in May 2013, ARCP announced the acquisition of 471 properties from General Electric (GE) for $807 million, and in July announced the acquisition of American Realty Capital Trust IV Inc (ARCTIV) for approximately $3.1 billion, thus becoming the second-largest real estate investment trust in the U.S. net lease industry.