Realty Income (O) to acquire VEREIT in $16 billion merger transaction.

Realty Income (O) announced today that it will acquire VEREIT (VER) in an all-stock merger transaction.  The combined company will have a pro forma enterprise value of approximately $50 billion and rank among the 10 largest equity REITs based on equity market capitalization.  In its presentation materials, Realty Income said that it expects the transaction to be approximately 10% accretive to the midpoint of the company's 2021 AFFO guidance on a leverage-neutral basis.  The merger is expected to close in Q4 2021 following shareholder approval from both Realty Income and VEREIT.

As part of the transaction, it was also announced that 97 commercial office properties generating over $180 million in annual rent would be spun off to shareholders as a newly formed public company.  Realty Income said that it would provide additional details regarding management, governance, and mechanics of the separation at a later date.

Realty Income is a large-cap equity REIT focusing on the acquisition and ownership of net-lease retail (84%) and commercial (16%) properties. The company was added to the S&P 500 in 2015 and has a current enterprise value of approximately $33 billion.