(Bloomberg) — German residential property firm Vonovia SE agreed to acquire rival Deutsche Wohnen SE for about 19 billion euros ($23 billion) in the biggest-ever takeover in European real estate, a deal that risks further stoking tensions over affordable housing.

The takeover, the year’s biggest in Europe, would reshape Germany’s property industry. The country’s two largest residential landlords control more than 500,000 apartments and risk raising further concerns about the market power of big property owners.

German landlords have faced intense public pressure over the past few years over rising prices, particularly in Berlin. Activists in the nation’s capital have targeted Deutsche Wohnen in particular with a referendum that’s seeking to force the city to buy out large apartment owners.

Amid concerns over housing and tensions over the companies’ large holdings in Berlin, the deal is an effort at a “new beginning,” Vonovia Chief Executive Officer Rolf Buch said on a conference call on Tuesday.

He said he will speak with Berlin Mayor Michael Mueller later on Tuesday to discuss the deal. The combined company plans to offer to sell about 20,000 apartments to the city, according to a presentation.

Under the deal, Vonovia will offer 53.03 euros per share in cash for each Deutsche Wohnen share, including a proposed dividend, the companies said in a statement late Monday, confirming an earlier Bloomberg News report. The bid represents about an 18% premium to Deutsche Wohnen’s Friday closing price.

The stock jumped as much as 16% to 52.38 euros on Tuesday. Vonovia’s shares fell as much as 6.8% to 48.57 euros.

Vonovia is planning a rights issue of as much as 8 billion euros after the completion of the transaction, expected in the second half. The companies anticipate 105 million euros in cost savings a year from the joint management of their portfolios.

The offer marks the third time Vonovia has tried to acquire Deutsche Wohnen. A previous attempt failed in February 2016 after Vonovia couldn’t win enough support from Deutsche Wohnen investors. Deutsche Wohnen called that bid hostile and not in the best interests of shareholders.

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Vonovia brought on advisers early last year to again consider the feasibility of a transaction, Bloomberg News reported at the time. In the end, it decided not to move forward with a bid.

The companies decided to pursue the transaction now after a mid-April decision by the German constitutional court to overturn a controversial rent freeze in Berlin. Buch said the ruling provided clarity over the property market.

The deal shows that Vonovia’s Buch was finally able to win over Deutsche Wohnen counterpart, Michael Zahn, after the two clashed over price during the failed pursuit about five years ago.

Unlike in 2015, both companies “decided to combine, hence it is easier to realize those synergies,” the Deutsche Wohnen CEO said on a conference call. “For shareholders, it’s a chance to be invested in a company that offers completely new perspectives.”

Zahn and Deutsche Wohnen Chief Financial Officer Philip Grosse are expected to be named to Vonovia’s management board after the acquisition, the companies said.

A takeover of Deutsche Wohnen would mark the crowning achievement for serial dealmaker Buch. He built Bochum-based Vonovia into a European property heavyweight through several acquisitions, including the 2019 purchase of Swedish landlord Hembla AB and a 2016 deal for Austrian developer Conwert Immobilien Invest SE.

Vonovia was founded in 2015 after Deutsche Annington Immobilien SE, which Buch led, acquired Gagfah SA in what was a record German real-estate transaction at the time. But the company traces its roots over 100 years back to housing companies built for German railway, steel and coal workers.

(Updates with share prices in seventh paragraph, comments from Deutsche Wohnen CEO in 13th)

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