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Two Of The World's Top Three Data Center REITs Agree To $5B Merger

In a merger that may dramatically alter the data center real estate landscape, Digital Realty Trust, the world's largest wholesale data center provider, has agreed to acquire the world's third-largest wholesale data center provider, DuPont Fabros, for $4.95B in stock.

A rendering of Digital Realty Trust's planned 12-story data center at 330 East Cermak Road, Chicago.

The merger will bring Washington, D.C.'s DuPont Fabros' data center network under the Digital Realty Trust umbrella and give San Francisco's Digital Realty Trust a bigger customer base and deeper reach into the strongest U.S. data center markets like northern Virginia, Silicon Valley and Chicago.

DuPont Fabros has 12 data centers in the U.S. and Canada, with another six under construction that are 48% pre-leased. This would allow Digital Realty Trust to significantly expand in those markets to "meet the rapidly growing needs of cloud and cloud-like customers," Digital Realty said.

Pending approval from each firm's shareholders, DuPont Fabros shareholders will receive a fixed exchange ratio of 0.545 Digital Realty shares per DuPont Fabros share, for a transaction valued at approximately $7.6B in enterprise value, including $1.6B in assumed debt.

Digital Realty Trust shares have fallen to $112.58/share after the merger was announced, while DuPont Fabros shares rose to $60.66/share.