Deutsche Wohnen and Vonovia Build Europe’s Largest Residential Real Estate Group

Deutsche Wohnen and Vonovia Build Europe’s Largest Residential Real Estate Group

In a landmark transaction that has upended the European real estate market, Sullivan & Cromwell is advising long-standing client Deutsche Wohnen on its merger with fellow real estate group Vonovia, executed through a €19 billion ($22.5 billion) cash takeover offer by Vonovia. The transaction is this year’s biggest merger in Europe and the biggest ever in the region’s real estate sector. The deal creates Europe’s largest residential real estate group, with a combined market capitalization of €45 billion ($54.9 billion). The combined company operates under the name Vonovia SE and owns more than 550,000 apartments with a gross asset/real estate value of approximately €90 billion.

A new business combination agreement was signed on August 1, following a previous voluntary public takeover offer by Vonovia for Deutsche Wohnen in May. By October 7, after the end of the regular acceptance period of the voluntary takeover offer, Vonovia had obtained 60.3 percent of the voting rights of Deutsche Wohnen and will become majority shareholder of the real estate company. This finalizes the deal.

The Deutsche Wohnen/Vonovia merger is the friendly return of a business combination discussed in the market for almost a decade. It comes more than five years after S&C led Deutsche Wohnen’s successful defense against Vonovia’s unsolicited €14 billion proposed public takeover offer, one of Germany’s largest hostile takeover battles ever.

S&C assembled a multidisciplinary team for this significant transaction. Lawyers from our Frankfurt office are leading the M&A and finance work, while European and German competition lawyers in Brussels and Frankfurt are addressing clearance matters.

This deal is the next step along S&C’s way of shaping the German residential real estate market for more than a decade:

  • The team has represented Deutsche Wohnen in all its capital markets and major financing transactions, including various large capital raisings and bond transactions, since 2009.
  • We also advised Deutsche Wohnen on its €3.6 billion tender offer for GSW Immobilien, taking over the then third-largest publicly listed German real estate group. 
  • Our Frankfurt team advised Vonovia not only as issuer’s counsel on its IPO in 2013, but also on the €3.9 billion acquisition of its competitor Gagfah, the then third-largest publicly listed German real estate group. 
  • After S&C client Deutsche Wohnen had launched a takeover offer for LEG Immobilien (the then third-largest publicly listed German real estate group) in 2015, we led Deutsche Wohnen’s successful defense against the unsolicited takeover Vonovia launched in consequence thereof. 
  • S&C also represented Deutsche Wohnen on its attempted acquisition of Austria’s conwert Immobilien Invest.   
  • We advised Goldman Sachs as the financial adviser to Austria’s BUWOG in connection with Vonovia’s voluntary public takeover offer for BUWOG.
  • We further advised Instone Real Estate, LEG Immobilien, Isaria Wohnbau and several other German residential real estate companies on their IPOs and/or M&A activities.

Learn more about S&C’s M&A and Commercial Real Estate practices and our European offices.

Meet members of our team.
Carsten Berrar is managing partner of the Firm's Frankfurt office and co-head of the Firm’s Capital Markets Group. He is one of Germany’s leading lawyers for both capital markets and M&A matters. His capital markets experience on both the issuer’s and underwriters’ side includes many of the largest and most significant IPOs, rights offerings and listings in Germany within the last two decades. At the same time, Carsten has advised on many landmark M&A transactions in Germany and he is a seasoned corporate and corporate governance advisor.

Konstantin Technau is partner in our Frankfurt office who has broad experience as a mergers and acquisitions, capital markets and finance lawyer. He regularly advises financial and strategic buyers on the financing of acquisitions. Over the years, Konstantin has advised principals on many of the most high profile German public M&A transactions.

Michael Rosenthal is the founder of S&C’s Brussels office and co-head of the Firm’s Antitrust Group, advising on the full range of EU and German competition law matters. He practices before the European Commission and the German competition authority and courts, as well as the European courts. He has advised clients on a significant number of the largest global transactions, as well as complex cartel investigations and monopolization matters.

Max Birke is a Banking & Finance partner in our Frankfurt office who advises on a wide range of financing and capital markets matters, M&A and real estate transactions. He advises corporate borrowers and private equity firms in complex cross-border financings as well as representing investment banks and other financial institutions as lenders, agents and arrangers.