Shareholders of VEREIT will receive 0.705 shares of Realty Income stock for every share of VEREIT they own. The deal is valued at $11 billion.
After closing, the office properties of both companies will be spun off into a separate publicly traded real estate investment trust. Realty Income will then focus on single-tenant net lease retail and industrial properties in the United States and United Kingdom.
“We believe the merger with VEREIT will generate immediate earnings accretion and value creation for Realty Income’s shareholders while enhancing our ability to execute on our ambitious growth initiatives,” said Sumit Roy, president and chief executive officer of Realty Income.
“Together, our company will enjoy increased size, scale, and diversification, continuing to distance Realty Income as the leader in the net lease industry,” he added. “VEREIT’s real estate portfolio is highly complementary to ours, which we expect to further enhance the consistency and durability of our cash flows.”
After the transaction, Realty Income will own a portfolio of 10,300 primarily single-tenant, net lease commercial real estate properties located in all 50 U.S. states, Puerto Rico and the United Kingdom. Major clients include Walgreens, Dollar General, FedEx, 7-Eleven, LA Fitness and Walmart.