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Germany’s Vonovia has agreed to buy Buwog in a cash deal valuing the Austrian real estate company at 5.2 billion euros ($6.12 billion), the two companies said on Monday.

The deal will further grow Vonovia’s portfolio of residential properties to almost 400,000 flats from around 350,000 now, cementing its position as Germany’s leading property group and adding further properties in Austria.

Buwog shareholders are to be offered 29.05 euros per share under the offer, an 18.1 percent premium to Friday’s closing price, which Vonovia said it would finance with debt capital.

Vonovia will also offer 115,753.65 euros in cash for each outstanding bond convertible into Buwog shares during the initial acceptance period and a reduced price during an additional three-month acceptance period.

Vonovia said it expected joint management of the two companies’ flats following the deal would lead to cost savings of around 30 million euros a year, a substantial part of which is to be realised by the end of 2019.

The deal will also have a positive effect on Vonovia’s underlying earnings per share and adjusted net asset value per share, Vonovia said.

Further details of the offer are to be announced in February.