Deutsche Wohnen

History

2021: Vonovia bought Deutsche Wohnen for 19 billion euros

At the end of May 2021, the German real estate giant Vonovia announced the acquisition of its rival Deutsche Wohnen for about 19 billion euros ($23 billion), which marked the largest merger of companies in Europe this year.

As a result of the largest transaction in the real estate sector, Vonovia will control more than 500,000 apartments. The deal will further strengthen the power of large property owners, and this problem has long been irritating for other market participants, especially in Berlin. In recent years, German landlords have faced pronounced public pressure due to rising prices. Deutsche Wohnen became the main target of activists after acquiring a large amount of social housing, which was put up for sale by the city to pay public debt.

Vonovia acquired Deutsche Wohnen for 19 billion euros

In recent years, the search for housing in the capital Germany has become a difficult task. Since 2009, rental prices in many areas have more than doubled. This forced local authorities to impose restrictions on rent increases in 2020. However, the Constitutional Court reversed this decision last month. Vonovia has promised to limit the regular rent increase to 1% per year in Berlin over the next three years. The agreement also includes concessions to the city and tenants. If the deal is approved, Vonovia offers the Berlin government to sell about 20,000 apartments and build about 13,000 new ones.

For the third time, Vonovia is trying to acquire Deutsche Wohnen. A previous attempt failed in February 2016, after Vonovia could not get enough support from Deutsche Wohnen investors. Now, under the deal, Vonovia will give 53.03 euros in cash for each Deutsche Wohnen share, including the proposed dividends.^[1]

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