(Bloomberg) -- Aroundtown SA has agreed to buy TLG Immobilien AG for 3.1 billion euro ($3.4 billion) in stock, in a deal that will create Germany’s biggest commercial landlord.

TLG shareholders will receive 3.6 Aroundtown shares for each share they own, valuing the stock at 27.66 euros, Luxembourg-based Aroundtown said in a statement Tuesday. That is a 3.2% premium to Monday’s closing price of 26.80 euros.

Ouram Holding SA, TLG’s largest shareholder with a 28% stake, has agreed to the deal.

For more details on the deal, click here

The combined company would be Germany’s largest commercial landlord, with more than 25 billion euros of assets, primarily offices, hotels and residential real estate. It will be renamed, but continue to have its German headquarters in Berlin.

“The transaction with Aroundtown is a unique opportunity for TLG to strengthen our presence in key cities in Germany as well as access new markets,” TLG said in the statement. “We will be able to achieve significant synergies resulting in higher operating margins, improve our credit profile and thereby attain a financial profile that would have been hard to achieve on our own.”

To contact the reporter on this story: Peter Vercoe in Sydney at pvercoe@bloomberg.net

To contact the editors responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net, Candice Zachariahs

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