ProLogis to acquire Catellus for $4.9 billion

ProLogis, a global provider of distribution facilities and services, and Catellus Development Corp., a real estate development company, have approved a definitive merger agreement under which ProLogis will acquire all of the outstanding common stock of Catellus for a total consideration of approximately $4.9 billion, including assumed liabilities and transaction costs.

The combined company will offer a network of distribution facilities and services, with over 350 million square feet in over 2,250 facilities owned, managed and under development in 75 markets in North America, Europe and Asia, supporting more than 100 million buildable square feet of potential development across its global markets.

The transaction is expected to be accretive to ProLogis’ estimated 2006 funds from operations by approximately 3% to 5%. Among the key accretion drivers are ProLogis’ integration of Catellus’ development operations into ProLogis’ fund management business, as well as significant cost savings in general and administrative expenses.

Jeffrey Schwartz, ProLogis’ CEO, says, “The addition of Ted Antenucci, president of Catellus Commercial Development, and his team of experienced development professionals will enhance ProLogis’ North American development capabilities and, in turn, our growth potential and shareholder value.”

Strong customer synergies also are expected to drive ProLogis’ continued expansion. Catellus customers tend to be large companies seeking newer, functional distribution centers, consistent with ProLogis’targeted Focus 500 customers.

Ted Antenucci comments, “We will continue several significant Catellus land development projects underway, including the redevelopment of the Robert Mueller Airport in Austin, Tex.; Pacific Commons in Fremont, Calif.; Los Angeles Air Force Base; and Enterprise Landing in Alameda, Calif.”

Following the closing of the transaction, Ted Antenucci will be named as president, global development for ProLogis. The merger with Catellus is subject to Catellus and ProLogis shareholder approval, as well as regulatory approvals and satisfaction of other customary closing conditions. The transaction is expected to be completed by the end of 2005.

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