Germany's largest apartment rental company Vonovia has reached the home straight with the takeover of rival Deutsche Wohnen: The Bochum-based group wants to raise around 8 billion euros as part of a capital increase and, as announced, finance part of the purchase price.

"With this capital increase we are completing the process of the merger with Deutsche Wohnen," said Vonovia CFO Helene von Roeder on Sunday evening.

Vonovia shareholders can now “acquire new shares at an attractive price” through the capital increase announced in May.

The new papers are to be offered to shareholders through an indirect subscription right of 20: 7 and at a subscription price of 40 euros.

Vonovia expects gross proceeds of around 8 billion euros and intends to use the net proceeds to partially repay syndicated loans for the acquisition of Deutsche Wohnen.

The stock market reacted negatively.

Vonovia's shares initially fell by 1.2 percent to around EUR 55 on Monday, later the minus decreased somewhat.

In contrast, Deutsche Wohnen's papers rose slightly by 0.6 percent at times to around 45 euros.

More than 500,000 apartments in stock

Vonovia secured a majority of 86.7 in Deutsche Wohnen in October after several unsuccessful attempts. The two companies together own more than 500,000 apartments valued at more than 80 billion euros, most of them in Germany. Vonovia had spent around 17 billion euros on Deutsche Wohnen shares. "We can now join forces to tackle the major societal and social challenges in the housing market," Vonovia boss Rolf Buch announced. Buch had to tremble for a long time about the takeover, in the summer the industry giant even missed the majority it was aiming for. It was only when the Bochum group waived all conditions at the decisive attempt that it removed the basis of speculation that it would fail and prevailed.The Deutsche Wohnen shares changed hands for 53 euros per share.

To finance the deal, Vonovia had secured a bridge loan of just over 20 billion euros. Now the Bochum-based company initiated the approximately 8 billion euro capital increase. In addition, apartments are to be sold. In Berlin, the real estate giants are selling around 15,000 apartments for around 2.46 billion euros to the public sector.

The subscription period for the new shares is expected to begin on November 24th and end on December 7th.

Vonovia has already reached an agreement with a number of banks: The offer is based on a share takeover agreement concluded between Vonovia and the major banks BofA, Morgan Stanley and Société Générale.

Other financial institutions such as BNP Paribas, Citigroup, Commerzbank and Deutsche Bank are also involved as additional joint bookrunners.

The contract provides for the obligation of the joint bookrunners to purchase new shares at the subscription price.

In addition, a number of funds have undertaken to exercise their subscription rights from the capital increase in full.

This also includes Vonovia's major shareholder Norges Bank.