Dear ladies and gentlemen, welcome to the analyst and investor call of Vonovia SE. At our customers' request, this conference will be recorded. As a reminder, all participants will be in a listen only mode. After the presentation, there will be an opportunity to ask questions. May I now hand you over to Rene, who will lead you through this conference.
Please go ahead, sir.
Thank you, Judith, and welcome, everyone, to our conference call on acquiring the majority stake in Henbla from Blackstone. I'm sure you have seen our ad hoc and press releases this morning, and maybe you have already had a chance to take a look at the presentation. It can be found on our website in the section Latest Publications. Our CEO, Urs Bulb and our CFO, Helin von Reuter, will lead through the presentation and then open up for Q and A. So at this point, let me hand you over to Rolfel.
Okay. Thank you very much, Rene. And also for me, a warm welcome to everybody. So I'm on Page 2 of the presentation. Of course, what we are doing here is in line with our strategic rationale.
We started to be in Sweden with the acquisition of Victoria Park. And we believe that also in Sweden, like in all other markets, residential is all about scale. The acquisition of the majority of Hemla is, in this respect, the normal logical next step and a huge opportunity for our company. So we will have now together Hemla and Victoria Park be the biggest residential player in Sweden with an unpermal exposure to the 3 big cities in Sweden. And you know we are focusing our base on big cities.
And of course, this is probably the best combination you can use. The 2 company has a very good complementary fit. So we are now in Malmo, Gothenburg and of course, as you will see in the slides, and biggest portion is in Stockholm. The transaction is accretive on group FFO per share and adjusted NAV per share. I think Helene will talk about this.
This will have no impact on rating or rating outlook. And we can realize the estimated operational and financial synergies of €30,000,000 already on the basis of the 69% voting rights acquired from Blackstone. So this, I think, is the next step for successful execution of our European strategy. To remind you, we continue in Austria to run a scalable business more thereafter. We have integrated now BUWOG and CONVERT.
In Sweden, we will do now the integration of these two companies and then we'll go on with further acquisitions and consolidation. In France, we actively engage with relevant players, but this will probably take some time. And in the Netherlands, we wait for opportunities. On the next page, you'll see a little bit again what happened. In Q4 2017, I think we announced and told you to the market that we want to proceed the European extension strategy.
This at this time, we said Austria, Sweden, France and Netherlands. We also signed in the Q4 2007 and Memorandum of Understanding this in France. And we bought BUWOG and we made a tender offer for BUWOG to ensure the scale in Austria. And in Q2 2018, we then obviously made the tender offer for Victoria Park. And now in Q4, we bought a smaller portfolio, which is actually where Park was big in 2,003 and the deal is in Sweden.
And we acquired a small company in France. So this is the next big step, and this will lead to market leadership in Sweden. But also this will give roughly 15% of our portfolio is now outside Germany, which I think is also an important message. We don't disclose the detailed figures on Victoria Park, but on Page 4, you can see that we have been very successful in Victoria Park over the last year, and this success actually make us strong believes that we now understand very well the Swedish market and that we are ready for the next step. As you can see, our rent has grown by 4%, our NAV per share has grown by 20%, so pretty successful.
And we are very happy with the management team and the experience we have made in Sweden up to now. Hemla is a major Swedish residential player, slightly bigger than Victoria Park, gross asset value of 3,100,000,000 also owned by a very well good management, also very strong KPIs in the past. You probably know some of you probably know that I used to be in the supervisory board of Die Carnegie, which is now Handler. So I know the company very well, and I had to step down before we acquired Victoria Park. But still from this past knowledge, I have good knowledge and I think it's a very interesting company, which a very good portfolio quality because the portfolio is mainly based in Sweden.
Actually, Victoria Park and Hemler together will deliver the market lead in Sweden. So this is probably some of you will remember our top line on the IPO presentation. This is the constantly data of the German market. Here, we have built now the constantly data of the Swedish market. You can see on Page 6 that there's a few companies left which are not public or public lease which are not listed, but which are owned still by pension funds.
So I think even smaller portfolios but also in bigger portfolios, there will be future consolidation possibilities in Sweden. Not tomorrow, don't be afraid, now we have to integrate on the long run. Already to do it today, so Hemla and Victoria Park, they have a market share of 2.1%. So the market share actually is Sweden is a little bit bigger than our market share in Germany. And if you look on the portfolio, it's actually a perfect fit.
Handler was concentrated on Stockholm. Victoria Park was concentrated on Stockholm Mine in Gothenburg. Now we have a portfolio which has actually 3 quarters in Stockholm. And of course, Stockholm is the most attractive region of Wittenberg and Malmo. So I would say this is transaction, the portfolio quality of Winovia and the season has improved.
And this is I hand over to Helena.
Hi, good morning. So looking at the transaction criteria, as Rolf already mentioned, it fulfills all of our acquisition criteria. And as such, we're looking at a €0.12 accretion per share on a pro form a basis for 2020 for group FFO and also accretive from an adjusted NAV view of €0.16 If we look at our rating impact, we don't expect any negative rating outlook as a result of the transaction, neither using our fifty-fifty acquisition criteria nor and what we are planning to do by financing the structure at this point with all debt. I think what needs to be said though is you have observed that we have changed from FFO I to group FFO. And as a result, we will need to revisit our acquisition criteria.
At this point in time, we are using our old ones. But just a sort of like preemptive notice to everybody, we will be coming out with new acquisition criteria at some point in due course. Moving on to the next slide, just looking at the transaction. So what are we doing? We're purchasing the Hempler shares from Blackstone at the share price of SEK 2.15 and that's roughly €1,142,000,000 in total.
We will be settling and that's music to the ears of a CFO. This purchase price predominantly in euros, so I'm saving money. And the implied enterprise value of Hembla is approximately €3,500,000,000 If you look at the implied premium, it's roughly the same across all measures. So roughly somewhere 11.5% premium to spot with 18.6 percent premium to last reported NAV. As you know, NAV in Sweden as a result of the ongoing modernization measures are going up.
So we're looking at an increased NAV most likely in 2019. So this morning, we signed the SBA with Blackstone. And if we complete that transaction that is subject to a Swedish antitrust, it will trigger mandatory bid for Novia. So we will expect to be out towards the end of the year with a mandatory offer to all minority shareholders. We will not be implying a minimum acceptance threshold.
So whatever comes our way, we are happy takers. At this point in time, I mentioned earlier, this transaction with Blackstone, we will be definitely doing all that. We will be taking the equity we raised in May preemptively. As you may remember, we said that is predominantly for transactions we see coming up in Sweden to sort of like finance the transaction. Once we look at the minority takeout, we reserve all options open.
It could be all debt. It could be equity. It could be a hybrid. It depends on how the company shapes up, how many minorities we get, what valuations we get. So this I will leave open and we'll decide at a later stage whatever makes most sense.
If I look at the transaction time line, as I said this morning, we signed the SBA with Blackstone. Somewhere October, November, we will get our merger control clearance, hopefully, from the Swedish antitrust authorities. At that point, we have 4 weeks then to launch the mandatory bid. And there's a 4 week acceptance period for shareholders. So somewhere around December 2019, we hope to have the end expected end of acceptance period and have this transaction done and dusted by the end of the year.
And I think that's it. And over to Rolf.
So thank you very much, Elena. So what you see in this I think this transaction should not come for you as a big surprise, probably in timing but not in the transaction itself. You can see here again that we deliver that we develop a strategy, we communicate it to the market and then we are going to execute it step by step. This will take several years. So but the strategy announced in 2017 is now one step further.
It's not the end of the strategy. I think there's a lot of things to do. But here, together with Victoria Park and Handler, we are becoming the largest landlord in Sweden. So we are now in Sweden, the Vonovia of Sweden, and with a very good exposure, very clear portfolio. So it will be clear that we will achieve economic of scale and that we will realize all our 4 plus 1 or 4 plus 2 strategy also in Sweden.
So this is very good. As Helena has told you, the transaction meets all acquisition criteria and executive Robo Novia shareholders in the 1st year of consolidation. And to remind you, we will continue to use our scale in Sweden now and will show that this is the same development. If you allow me to compare the transaction, it is probably for Sweden the same type of transaction we have done in the past where we merged GACBA and Deutsche Enig. And keep in mind, it's really smaller from the size and from the importance of this.
This is comparable to the Energen and GAPA transaction, and this will give a great future for the Swedish activities. In Austria, we will continue to run an operating scalable business and probably also there we will see acquisitions if possible. And France, we are still continuing to work on it. And hence, Netherlands, we are waiting for opportunities. So again, Vonovia is developing a strategy, is trying to work it out step by step, and we will deliver step by step, not only today, but also in the next year.
With this, thank you very
much. Operator, we can then move to the Q and A, please.
The first question is from Sander Banc, Barclays. Your line is now open.
Hi, good morning. Two questions for me, please. First one is on the group FFO accretion. Can you just give a bit more detail on how much of this accretion is derived from privatization and how much is from the ongoing rental business? And the second one is on the NAV accretion.
Can you please explain how this deal is NAV accretive given that the offer price is SEK 2.15 and Hemble has a last reported NAV of SEK 181. Thank you.
So the first time doing it, the second is probably Helene doing. So to be very clear on the first, we are not putting into account any disposal. So in Sweden, the business model is relatively simple. We have the slats, which are doing where you have to do modernization in a much higher scale than in Germany. And with this, you have a significant NAV accretion, and we are not disposing assets in Sweden.
So everything is coming from this business. Of course, there is significant synergies because today we have 2 subcritical companies, Handler and Victoria Park. And this is the size we can now install the full platform, which you know from us in Germany. So synergies are coming from there. And we will get upper cast and organization.
So you will see a copy of Germany in Sweden
now. Cool. And the NNAF sorry, NNAF accretion?
Okay. So the NAV accretion, as you can see, is for 2020 expected. So it's not current NAV. And the reason why you see such strong NAV accretion is because ultimately, these Swedish companies with the investment that's being done are hugely NAV accretive on the past and also in the future. If you actually look at the Victoria Park's success story slide, which is Slide 4, you can see how the mechanism works.
And actually, that gives us a lot of confidence in why we're so excited about the deal.
Probably tell me one thing, we are not giving NAV guidance, as you know, because but to be very clear, the price we are paying is more or less the expected NAV of the year end of this company.
Okay. That's clearly no guidance. And but just from my understanding, is that NAV accretion, is it then all expected to be from further assumed decompression? Or is that mainly from investments in the portfolio that are capitalized at a lower yield?
Yes. So it's very easy. You know this. It's not yield compression. It's portfolio's investment with a higher yield than in Germany.
And EU puts this on the balance sheet and the valuations and it just comes. This is the model in Sweden. You can see it in Victoria Park, you can see it in Hamburg, And actually, it's the same model that you see in Germany, except that in Sweden, they are doing much more modernization of that to lead to their portfolio.
Okay, excellent. Thank you very much.
The next question is from Mark Marci, Bank of America Merrill Lynch. Your line is now open.
Yes. Barry, good morning everyone. Just one final detail on this FFO accretion. Is that for 61 percent of Embla? Or is it for 100 percent acquisition of Embla, the accretion place?
Okay. Ralph, I do this one. This is for 100% acquisition.
Okay. What sort of amount of modernization do we should we expect from Embla just based on what is targeted for 2019 or what has been done in 2018? And how do you would like to potentially increase that amount in the future?
No, I think, Marc, you should because the amount of modernization is dependent on the flotation on the apartments. So we will continue probably more or less the same speed like Handler is doing. What we will do is, of course, and this is what we have seen in Victoria Park, we will use a much more efficient system to do the modernization. So that's why the modernization will be probably executed a little bit faster and much more efficient in terms of cost. And it's in Sweden, we don't have a system where we have a percentage you can put on top of the rent, but the new apartment is negotiated with the tenant association.
So cost saving is really here a big advantage. So assume that the speed is continuing like it was in Hamblan and Victoria Park.
And what sort of year round curve then we should assume, the same then for Victoria Park?
Yes.
Okay. Thank you very much.
Much. Keep in mind, of course, there is 2 companies which are today subcritical. So a big part of the synergies is coming from just operational excellence. So this is like the merger you have seen in GACCO and Duchanning, same thing will happen there. And second is, of course, financing.
We have experiences in Victoria Park for a big company like Monobe as much cheaper than for a stand alone company owned partly by private equity.
And maybe just a last one just to do a proper math. Are you expecting any tax synergies from Embla?
No, we don't have to put this into calculation.
Okay. Thank you very much.
The next question is from Christopher Fermantel, Morgan Stanley. Your line is now
I just wonder, while we're on the subject of M and A, whether you can just briefly talk about France. I know you mentioned it. How much closer are you now to an investment in France? Has that changed? Has the situation changed at all?
Or are we basically in the same position as we were at the start of the year?
Very good question. France is a difficult market for us. So there's always opportunities coming up. Sometimes they are close to realize, sometimes they have not. So I would say we are still working in France.
We have to find a way how we can do investment without the assumptions that the law is changing. So again, as I say always, France is a longer term perspective, but of course, this is a bigger market, and that's why we will continue to do in France. But it's a difficult market in this legal environment at the moment. Thank you. But you never know.
The next question is from Georg Handes, Bankhaus Lampe. Your line is now open.
Hey, good morning from Dusseldorf. I've just one question remains. How much of the synergies, the €30,000,000 is already factored into this accretion for 2020?
They're all factored in because it's on a pro form a basis.
So you expect more or less the EUR 30,000,000 to be achieved already by 2020?
More or less, yes.
Okay. Thanks.
At the moment, there are no further questions. As there are no further questions, I would like to hand back to Jurenee.
Thank you, Judith. That concludes our call today. Thank you everyone for dialing in on such short notice. As always, if you have further questions, please feel free to reach out to me or my team. And that concludes the call.
Have a great day everyone.
Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.