Real Estate Rift

Vonovia Fails in Record Real Estate Deal

Vonovia DPA2
Vonovia's dreams to create one of Europe's largest real estate firms are thwarted for now.
  • Why it matters

    Why it matters

    With the rejection of the Vonovia’s offer, one of the biggest consolidations in European real estate has been thwarted.

  • Facts


    • Vonovia only won over 30.4 percent of Deutsche Wohnen investors, instead of the necessary 50 percent.
    • The deadline for support for the bid ended Tuesday night at midnight.
    • The share prices of both companies rose following the news of the unsuccessful deal.
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It was a deal that nobody seemed to want – a bid that would have created a giant of German real estate and one of the biggest property companies in Europe. In the end, shareholders simply didn’t take the bait.

Germany’s largest real estate company Vonovia on Wednesday conceded defeat in a long-running hostile takeover bid for its biggest rival, Deutsche Wohnen.

Vonovia, in a statement, said that just 30.4 percent of Deutsche Wohnen’s shareholders had accepted its takeover offer as of 12:00 p.m. local time on Wednesday. “With that, the minimum acceptance threshold of 50 percent set by Vonovia has not been reached,” the company said.

The takeover would have been the largest-ever in German real estate, valued at €14 billion, including debt. Deutsche Wohnen’s management, which has fought tooth-and-nail against the merger for weeks, welcomed news of its failure on Wednesday.

“We are pleased and thank our shareholders, employees and renters for their support,” Michael Zahn, the chief executive of Deutsche Wohnen, said in a statement. “Our arguments against this transaction have convinced the market.”

Investors on both sides also rejoiced. Vonovia shares were up almost 6 percent by 3 p.m. Frankfurt time, marking the third-strongest gain in Germany’s blue-chip DAX index. Deutsche Wohnen shares rose just under 7 percent over the same period, leading gains on the MDAX index of mid-sized firms.

The deadline for the offer had ended at midnight on Tuesday. Leading up to it, Vonovia had been working for weeks to woo shareholders, with the tone getting rougher over time.

“Our arguments against this transaction have convinced the market.”

Michael Zahn, CEO, Deutsche Wohnen

The merger was never really just about the two property giants. Vonovia first announced its takeover bid last year, shortly after Deutsche Wohnen had made a bid for another major competitor, LEG, in late September. On November 30, the majority of Vonovia’s shareholders approved the takeover attempt.

Given that background, Vonovia tried to put a positive spin on Wednesday’s failure, noting that Deutsche Wohnen’s bid for LEG had also failed as a result of its efforts.

“The timing of our takeover bid wasn’t set by us, but by Deutsche Wohnen’s push [for LEG],” Rolf Buch, the chief executive of Vonovia, said in a statement Wednesday, adding: “We have succeeded in keeping LEG an independent, listed company. LEG is an important partner for us.”

While Deutsche Wohnen celebrates the outcome as a success and Vonovia passes off LEG’s survival as good news, insiders estimate that both companies took a financial hit from the unsuccessful bid. The firms spent up to €50 million each on lawyers, investment banks and roadshows to win over shareholders, insiders said.

“We have achieved that LEG remains an independent, listed company. LEG is an important partner for us.”

Rolf Buch, CEO, Vonovia

Deutsche Wohnen’s management had rejected the offer early on as unsatisfactory, claiming that the price of seven Vonovia shares and €83.14 per 11 Deutsche Wohnen shares was too low.

But Mr. Buch did not want to give up. He lowered the minimum acceptance threshold for the offer to 50 percent and extended the deadline for shareholders to agree in an attempt to complete one of the biggest consolidations in European real estate. The merged company would have counted more than 500,000 rental units across Germany.

The ambitious effort may have been thwarted by the generally pessimistic mood on Germany’s stock exchange since the start of this year.

On Monday, the DAX blue-chip index, which includes Vonovia, dipped below the psychologically important threshold of 9,000 points for the first time in almost two years. Asset managers were busy trying to minimize their losses with bank and automotive shares, and might not have had the time to decide on a last-minute sale of their Deutsche Wohnen shares.

For Mr. Buch, it’s a defeat, but it’s probably not the end of his shopping spree. Just last week, speaking at an investor conference in Frankfurt, he noted that two million flats in Germany are still privately managed. All are potential targets for Vonovia.


Christopher Cermak is an editor with Handelsblatt Global Edition in Berlin. Reiner Reichel is an editor with Handelsblatt. Franziska Roscher also contributed to this article. To contact the authors:,

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