Both companies have substantial portfolios in North America, Western Europe and Japan. ProLogis is well-established in the United Kingdom and Central and Eastern Europe, and AMB has a significant presence in China and Brazil. “This merger is about two great companies coming together to create a stronger platform for sustainable value creation and growth,” explains Hamid R. Moghadam, AMB CEO, in a prepared statement. “By joining forces, this merger will create a company positioned to be the leading global provider of logistics real estate—a Blue Chip REIT.”

He continues that “the combined company will be a global player active on four continents. This enhanced platform will enable us to better serve the needs of multi-market customers and provide them with both existing world-class facilities and unmatched development capabilities. The combined company will also be well-positioned to create more opportunities and value for both our shareholders and fund investors.”

Kurt Strasmann, managing director in Voit Real Estate Services’ Anaheim, CA-office recently told GlobeSt.com that the combination of these two companies “will help create the most efficient, effective industrial real estate organization with the best, most diverse talent.” He continued to point out that with the two company’s existing tenant base, what the merger would do is that “it would allow them to really be able to help service those existing companies in multiple markets and expand that base dramatically, so it would be huge.”

According to Walter Rakowich, ProLogis CEO, the two companies “have developed an achievable plan to put these companies together seamlessly. The merger of these two leading industrial platforms will advance a number of priorities already underway at each company.” The priorities he mentions include: “improving efficiency and reducing costs by better aligning our portfolios through the reduction of non-core assets and the recycling of capital into higher growth opportunities; increasing asset utilization by stabilizing the operating portfolio; leasing up the development portfolio; and monetizing the land bank.”

As for leadership, Moghadam and Rakowich will serve as co-CEOs through Dec. 31, 2012, at which time Rakowich will retire, and Moghadam will become sole CEO of the combined company. Moghadam also will be chairman of the combined company and will be primarily responsible for shaping the company’s vision, strategy and private capital franchise.

Rakowich will be principally responsible for operations, integration of the two platforms and optimizing the merger synergies. Until Dec. 31, 2012, Rakowich also will serve as chairman of the executive committee.

Current ProLogis CFO William Sullivan will continue to serve as CFO and will retire from ProLogis on Dec. 31, 2012. During this period, according to a prepared statement, Thomas Olinger, AMB’s current CFO, will be responsible for day-to-day integration activities and report to the CEOs; he will become the CFO of the combined company on Dec. 31, 2012.

Following the close of the transaction, the combined company’s corporate headquarters will be located in San Francisco, and the combined company’s operations headquarters will be located in Denver.

The transaction is expected to be immediately accretive, with approximately $80 million in estimated annual gross G&A savings, to be realized upon full integration, which is expected to occur over the 18-month period following the closing, according to the statement. “We continue to see improvements in operating fundamentals across the globe with increasing occupancies and more positive net absorption,” says Rakowich. “As global demand picks up and trade activity returns to more robust levels, we believe our combined footprint and capabilities will allow us to better meet the real estate needs of our global customers and drive future growth.”

On a pro forma basis, following the merger, former ProLogis equity holders will hold approximately 60% of the combined company’s equity, and former AMB equity holders will hold approximately 40% based on the exchange ratio. The combined entity is expected to provide shareholders with enhanced liquidity.

Another benefit of the transaction, according to Moghadam, “is the companies’ complementary private capital businesses. Our combined company will be a market leader in the industrial real estate private capital sector, with a broad range of product offerings across the major markets including the Americas, Europe and Asia and across the risk/return spectrum. The combined company will have a global team with deep experience in investment management spanning three decades.”

On a pro forma basis, the combined company’s owned and managed assets, excluding development, were on average approximately 93% leased as of Dec. 31, 2010, outperforming market averages over the last three years, according to the prepared statement. The combined company is expected to have significant liquidity, a strong balance sheet and a well-staggered debt maturity profile provided by long-standing lending partners. “Our goal is to create one of the strongest balance sheets in the REIT industry, which will provide greater financial flexibility to capture market opportunities across business cycles, improve cost of capital and help better manage currency risk,” Sullivan says.

Morgan Stanley acted as financial advisor to ProLogis, and Greenberg Traurig and Mayer Brown acted as legal advisors to ProLogis. J.P. Morgan Securities LLC acted as financial advisor to AMB, and Wachtell, Lipton, Rosen & Katz acted as legal advisor to AMB.