Realty Income Corporation (NYSE:O) entered into a definitive merger agreement to acquire VEREIT, Inc. (NYSE:VER) for $11.2 billion on April 29, 2021. Under the terms of the agreement, VEREIT shareholders will receive 0.705 shares of Realty Income stock for every share of VEREIT stock they own, subject to possible adjustment. Immediately following the closing, the companies expect to effectuate a taxable spin-off of substantially all of the office properties of both companies into a new, self-managed, publicly traded REIT ("SpinCo"). Following the merger and the spin-off, Realty Income will continue as the surviving public entity. Realty Income and former VEREIT shareholders are expected to own approximately 70% and 30%, respectively, of both Realty Income and SpinCo. Upon a termination of the Merger Agreement, in certain circumstances, VEREIT will be required to pay a termination fee to Realty Income of the lesser of $365 million or the maximum amount that could be paid to Realty Income without causing it to fail to meet the REIT requirements for such year, except that in certain circumstances the termination fee will be the lesser of $195 million or the maximum amount that could be paid to Realty Income without causing it to fail to meet the REIT requirements for such year if (1) a third party submits a Qualified Proposal prior to May 29, 2021 and (2) prior to June 13, 2021, (i) VEREIT terminates the Merger Agreement to enter into an agreement with respect to a Superior Proposal, or (ii) Realty Income terminates the agreement following VEREIT's board of directors changing its recommendation. Upon a termination of the Merger Agreement, in certain circumstances, Realty Income will be required to pay a termination fee to VEREIT of the lesser of $838 million or the maximum amount that could be paid to Realty Income without causing it to fail to meet the REIT requirements for such year. Realty Income will continue to be led by President and Chief Executive Officer Sumit Roy and its existing senior management team. Michael D. McKee will remain Realty Income's Non-Executive Chairman of the Board of Directors. Upon closing, two VEREIT directors will be appointed to the Realty Income board.

The closing of the Mergers is subject to certain conditions, including: (1) adoption and approval by VEREIT's stockholders of the Merger Agreement and approval by Realty Income's shareholders of the Realty Income Share Issuance; (2) the effectiveness of the registration statement on Form S-4 to be filed with the U.S. Securities and Exchange Commission by Realty Income in connection with the transactions contemplated by the Merger Agreement; (3) approval for listing on the New York Stock Exchange of the shares of Realty Income Common Stock to be issued in the Mergers or reserved for issuance in connection therewith and customary closing conditions. The boards of directors of both companies have unanimously approved the transaction. Realty Income and VEREIT have each scheduled special meetings of their respective stockholders to be held on August 12, 2021. At the special meeting of Realty Income, Realty Income stockholders will be asked to consider and vote on proposal to approve the issuance of Realty Income common stock in the mergers pursuant to the merger agreement. As of August 12, 2021, VEREIT's shareholders and Realty Income stockholder's approved the transaction. On October 22, 2021, the registration statement was declared effective by the SEC. The merger is expected to close during the fourth quarter of 2021. As of October 22, 2021, the transaction is anticipated to close on November 1, 2021. The transactions are expected to be over 10% accretive to Realty Income's AFFO per share in year one.

Moelis & Company LLC is serving as lead financial advisor and provided fairness opinion, Wells Fargo Securities is serving as financial advisor, and William Cernius, Charles Ruck, David Meckler, Ana O'Brien, Pardis Zomorodi, William Kessler, David Taub, Andrew Baker, Kenneth Askin, Christopher Norton, David Kuiper, Drew Gardiner and Andrew Gray of Latham & Watkins LLP acting as legal advisors to Realty Income. J.P. Morgan Securities LLC is serving as exclusive financial advisor and provided fairness opinion and Adam O. Emmerich and Karessa L. Cain of Wachtell, Lipton, Rosen & Katz acting as legal advisors to VEREIT. Georgeson LLC is acting as proxy solicitor to Realty Income and will receive a fee of $15,000. Okapi Partners LLC is acting as proxy solicitor to VEREIT and will receive a fee of $10,000. Computershare Trust Company, National Association is the transfer agent of Realty Income common stock. Morgan Securities will receive a transaction fee of $19 million for its services as financial advisor and a fee of $5 million for delivery of opinion. VEREIT will pay J.P. Morgan a fee of up to $38 million, $5 million of which became payable to J.P. Morgan at the time J.P. Morgan delivered its opinion.

Realty Income Corporation (NYSE:O) completed the acquisition of VEREIT, Inc. (NYSE:VER) on November 1, 2021. The common stock of the combined company will trade under the symbol "O" on the NYSE. two former VEREIT directors, Priscilla Almodovar and Mary Hogan Preusse, were appointed to the Realty Income board.