American Realty Capital Properties has agreed to buy Cole Real Estate Investments for $11.2 billion, a deal which would create the largest net lease REIT in the U.S.
The merger will create a company with a combined portfolio valued at $21.5 billion, including 3,732 properties and 102 million square feet, the companies said in an announcement.
The properties in the combined portfolio will be leased to more than 600 tenants in 49 states and Puerto Rico. New York-based American Realty will be 99 percent occupied with an average lease term of 11 years, the companies stated.
"Far more can be accomplished by these two great companies working together than either one could have hoped to achieve independently," American Realty chief executive officer Nicholas Schorsch said in the statement.
The new entity would surpass the size of the current market leader, Realty Income Corp, which has a portfolio of 3,013 properties at year-end 2012, Reuters reports.
The companies expect a cost saving of $70 million in the first year of the merger.
New York-based American Realty will offer 1.0929 of its shares or $13.82 in cash for each Cole share. American Realty secured $2.75 billion in financing from Barclays for the deal. It is expected to close in the first half of 2014.