Cousins Properties and TIER REIT, Inc. announced that they have entered into a definitive merger agreement to combine in a 100 percent stock-for-stock transaction. The transaction will create a Class A office REIT with a combined portfolio of over 21 million square feet located across the Sun Belt. The combined company will have an equity market capitalization of approximately $5.9 billion and a total market capitalization of approximately $7.8 billion.

Under the terms of the agreement, Cousins will issue 2.98 shares of newly issued common stock in exchange for each share of TIER stock. The all-stock merger is intended to qualify as a tax-free "reorganization" for U.S. federal income tax purposes. Upon closing, Cousins and TIER stockholders will own approximately 72% and 28% of the combined company's stock, respectively. The transaction is subject to customary closing conditions, including receipt of the approval of both Cousins and TIER stockholders. The transaction is expected to close during the third quarter of 2019.

"The combination of these two highly complementary companies creates the preeminent Sun Belt office REIT with a best-in-class balance sheet. The company will own an unmatched portfolio of trophy office properties in the premier submarkets of Atlanta, Austin, Charlotte, Dallas, Phoenix and Tampa," said Colin Connolly, President and Chief Executive Officer of Cousins. "In addition, the company will be uniquely positioned to drive superior value for shareholders through its highly pre-leased existing development pipeline and well-located strategic land holdings for future development."

"This transaction will be transformative for both companies," said Scott Fordham, Chief Executive Officer of TIER. "The alignment of high-quality properties and common geographic footprint in our respective portfolios will offer shareholders the opportunity to benefit from a truly differentiated Sun Belt focused office platform. In addition, with an enhanced balance sheet, our shareholders will be able to benefit from further value creation in Austin, Dallas and Atlanta with TIER's pipeline of over 5 million square feet of development and redevelopment opportunities."

Leadership and Organization

Each of the Board of Directors of Cousins and TIER have unanimously approved the merger. Cousins' Board of Directors will be increased to eleven members upon closing, with two additions from TIER's Board of Directors, one of which will be Scott Fordham. Larry Gellerstedt, Cousins' Executive Chairman of the Board of Directors, will serve as Executive Chairman of the Board of Directors of the combined company. Colin Connolly, Cousins' President and Chief Executive Officer, and Cousins' existing senior management team will continue to lead the combined company.

Upon completion of the merger, the company will retain the Cousins name and will trade under the ticker symbol CUZ (NYSE). The combined company's headquarters will be located in Atlanta, GA.

Anticipated Synergies

Annual net G&A savings are anticipated to be approximately $18.5 million, to be realized immediately upon closing. These savings will be derived primarily through the elimination of duplicative costs associated with supporting a public company platform as well as the elimination of duplicative costs in the markets where both companies have an existing presence. In addition, the combined company also anticipates realizing operational and leasing synergies through increased market scale.

Advisors

Morgan Stanley is acting as exclusive financial advisor and Wachtell, Lipton, Rosen & Katz is acting as legal counsel to Cousins. J.P. Morgan Securities LLC is acting as exclusive financial advisor and Goodwin Procter LLP is acting as legal counsel to TIER.