STAMFORD, CT-GE Capital, through its commercial real estate business (GE Capital Real Estate), will secure a foothold in a number of secure real estate sectors, with the acquisition of international real estate holding company Security Capital Group Inc. Published reports place the value of the deal at $4 billion.

The two firms reported that they had reached a definitive agreement on the purchase deal by GE Capital on Friday, Dec. 14. The transaction, which requires approval by Security Capital Group shareholders as well as from a number of regulatory agencies, is expected to close during the first quarter of 2002. The deal will give GE Capital a foothold in the self-storage, parking and grocery-anchored retail sectors.

“Security Capital has an excellent reputation in the real estate industry, and we are pleased to be adding its first-rate management team to our own,” says Michael Pralle, president and chief executive officer of GE Capital Real Estate. “GE Capital Real Estate has become one of the most diverse global resources for commercial real estate capital. This acquisition complements our current activities by providing us with new platforms in self-storage, grocery-anchored retail and parking — some of the most stable asset classes in real estate.”

When the deal closes, GE Capital will have ownership interest in Storage USA, an owner and developer of self-storage facilities; Regency Centers, an owner and developer of grocery-anchored retail shopping centers and InterPark, a manager and owner of parking facilities. Also part of the transaction includes GE Capital’s acquisition of BelmontCorp., an owner and developer of senior-assisted living facilities; real estate investment advisory firm Security Capital Research & Management and an interest in Security Capital European Realty, a public car parking, self storage and office facilities owner and operator for multi-national companies in Europe.

Security Capital’s principal offices and those of its majority-owned affiliates are located in: Brussels, Chicago, El Paso, Houston, London, Luxembourg, New York and Santa Fe.

Under terms of the deal, Security Capital’s Class B stockholders will receive $26 per share, payable in cash or a combination of cash and shares of the common stock of ProLogis currently held by Security Capital. Security Capital’s Class A stockholders will receive 50 times the consideration paid to its Class B stockholders, GE Capital officials say.

Both companies note that if payment is made in cash and shares, the total value for Class B stockholders would total $2.9 billion in cash or $18.90 per Class B share and $1.1 billion in ProLogis shares at $7.10 per Class B share, according to exchange ratios based on Dec. 13 share prices.

The deal also requires GE Capital’s assumption of $1.4 billion in debt and preferred stock and a cash balance of approximately $1.4 billion, which includes proceeds from Security Capital’s recently announced sales of Homestead Village Inc., and its interest in CarrAmerica Realty Corp.

Company officials add that Merrill Lynch & Co. acted as exclusive financial advisor to GE Capital and Goldman Sachs was the exclusive financial advisor to Security Capital in the transaction.

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