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CHICAGO-Already the largest office REIT in the US, Equity Office Properties Trust nearly tripled in market capitalization Monday and catapulted into the top 13 among publicly-held companies based here. With shareholders of Equity Office Properties Menlo Park, CA-based Spieker Properties voting overwhelmingly to approve a $7.3-billion merger, the new company now has a market capitalization of $14.8 billion, says Diane M. Morefield, senior vice president of investor relations.

At least for now. Although that market cap ranks 13th among Chicago area-based companies, that does not include Seattle-based Boeing Corp., which is moving its corporate headquarters to 100 N. Riverside Plaza later this summer. Its $49-billion market capitalization will make the aircraft maker the No. 2 company in the area, about $25 billion behind North Chicago, IL-based Abbott Laboratories. Billionaire Sam Zell’s other REIT, Equity Residential Properties Trust, has a market capitalization of $7.6 billion, making it the 21st largest publicly-held company in the market.

Holders of more than 82% of Equity Office shares entitled to vote approved the merger while just 1.2% registered opposition. Meanwhile, the merger garnered support from holders of 74% of Spieker Properties stock. The approval at the Equity Office Properties special meeting took about 15 minutes, with no comments from the four shareholders present.

Besides passing up such companies as media monolith Tribune Co., retailer Sears Roebuck & Co. and banking giant Northern Trust in terms of market capitalization, the merger gives Equity Office Properties even more ability to drive harder bargains with vendors, Morefield indicated, producing cost savings in the operations of its 125-million-sf portfolio.

“We can offer more flexibility and space options,” says Morefield, defending the $219-per-sf price paid for the predominantly West Coast Spieker portfolio. “This portfolio would be impossible to replicate in single transactions. . . We think it’s an attractive price for the quality of the Spieker portfolio.”

The deal includes more than stock transfers and additions of property, however. “We welcome approximately 350 Spieker employees to Equity Office, and recognize the employees of both organizations for their efforts in achieving a smooth integration of our two companies,” says Equity Office Properties president and CEO Tim Callahan.

To read about the effect of the merger in the LA area, click on: After Spieker Deal, Equity Office Looks Ahead

For the Portland angle: EOP Adds to Puget Sound Office Dominance

For the original story: Equity, Spieker Close $7.3-Bil Merger

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