ProLogis and AMB Property say they are negotiating a potential blockbuster merger that would combine two of the world's largest managers of distribution facilities.
The companies disclosed the merger talks late Wednesday, saying their goal is a "merger of equals" and would involve a simple all-stock transaction based on their respective share prices before the announcement. Shares in both publicly traded industrial real estate operators surged in trading Thursday on the news.
A combination would create an industrial properties giant with more than 630 million square feet of distribution centers owned or controlled around the world.
Denver-based ProLogis is the larger business, with some 475 million square feet of warehousing in its portfolio. AMB has a smaller property list, with about 158 million square feet of warehousing the company has invested in or owns.
AMB has been more stable financially in recent years, however, while the larger ProLogis divested some business and underwent a leadership change as the company struggled through the 2008-2009 downturn in global trade.
ProLogis reported $109.5 million in net losses in the first three quarters of 2010, although the company also reported $680 million in new development. AMB, which has focused more on what it calls fast-throughput facilities at airports and ports, turned a $22.3 million net profit over the same period last year.