ProLogis (PLD) has agreed to buy rival real-estate investment trust Catellus Development Corp. (CDX) for $3.6 billion in a cash and stock deal that will create the world's largest network of warehouses and distribution services.

The combined company will control more than 2,250 facilities with 350 million square feet in North America, Asia and Europe. It will also consist of more than 100 million square feet of potentially developable land, according to the companies.

Shareholders of San Francisco-based Catellus will have the choice of receiving either $33.81 in cash or 0.822 of a ProLogis common share for each Catellus share they own. That's a 16 percent premium to Catellus' Friday closing price of $29.24 on the New York Stock Exchange (search). Shares of Catellus rose $3.84, or 13 percent, to $33.08. ProLogis shares fell $1.02, or 2.5 percent, to $40.35.

ProLogis, which is based in Aurora, Colo., will also assume $1.3 billion in Catellus debt and transaction costs as part of the deal.

Following the close of the deal, the company's board will consist of 12 ProLogis members, as well as Catellus Chairman and Chief Executive Nelson C. Rising and another Catellus board member to be named later. Ted Antenucci, president of Catellus Commercial Development, will be named as president of global development, ProLogis said.

The acquisition is expected to boost ProLogis' funds from operations — a key measure of success for real-estate investment trusts (search) — by about 3 to 5 percent, the companies said.