(Reuters) - AMB Property Corp has struck a deal to buy rival ProLogis for $5.7 billion in stock, combining the two largest U.S. owners of warehouse and distribution centers around the world in one of the biggest real-estate deals since the financial crisis.

The deal comes as ProLogis, the larger of the two companies, has been struggling with a mountain of debt.

The new company initially will be run jointly by the current chief executives of AMB and ProLogis; AMB CEO Hamid Moghadam will become sole CEO at the end of 2012. The company will be based in San Francisco, home to AMB.

Both AMB and ProLogis serve customers who manufacturers or ship goods all over the world. Their buildings, which can be the size of 17 U.S. football fields, store goods from drugs to shampoo to car parts.

While both companies have big footprints in the United States, the combined company will give AMB a large presence in the UK and Eastern Europe. AMB is active in China and Brazil, where ProLogis does not have a presence. The combined company will operate on four continents and in 78 percent of the global economic market.

"If you look at the past real estate M&A deals, it's only about scale and getting bigger," Moghadam said. "This strategic value of this transaction is so unique."

The deal is also expected to yield a company with a bigger balance sheet with a lower cost of capital, said Walter Rakowich, CEO of Denver-based ProLogis.

The deal, expected to close no later than the end of the second quarter, is expected to result in $80 million of savings annually, or about 20 percent of the two companies' overhead, Moghadam said. Neither CEO would say how long the two have been in talks or how many jobs would be cut.

The combined company is expected to have a stock market value of about $14 billion, with AMB comprising $8.7 billion of that and ProLogis $5.7 billion, Moghadam said.

Under the terms of the all-stock deal, each ProLogis common share will be converted into 0.4464 of a newly issued AMB common share, the companies said.

AMB shares were up 1.7 percent at $33.50 in early trade on Monday, while ProLogis shares fell 0.7 percent to $15.10.

The two companies said last week that they were in merger talks.

ProLogis owns or manages about 435 million square feet (40 million square meters) of real estate, mainly in the United States, Europe and Japan. San Francisco-based AMB has about 158 million square feet (15 million square meters) of space in the United States, China, Brazil and Mexico.

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