The proposed transaction would be a statutory all-share merger, with Sorouh shareholders receiving 1.288 Aldar shares for each Sorouh share they hold. On the effective date of the merger, Sorouh shares would be delisted from the Abu Dhabi Securities Exchange and Sorouh would be dissolved as a legal entity. Aldar will be named Aldar Sorouh Properties PJSC (Aldar Sorouh).
The merger would create one of the largest listed real estate companies in the Middle East and North Africa region, with over AED 47 billion of combined total assets as of September 30 2012, and combined market capitalization of approximately AED 10.9 billion based on closing share prices on 17 January 2013. The combined group will have a diversified portfolio of assets with total equity of AED 14.7 billion as of 30 September 2012 and an attractive pipeline of assets under development in Abu Dhabi.
The boards of the two companies believe that the combined business will offer significant benefits to all stakeholders. This would bring together two complementary businesses that will have a more diversified and balanced asset portfolio, a strong balance sheet, visible high quality earnings, better access to capital markets and synergies of up to AED 110 million per annum by 2015. Customers will benefit from a broader product suite across a range of assets within the Emirate of Abu Dhabi.
Abubaker Seddiq Al Khouri, currently Managing Director at Sorouh, is proposed to be the Chairman of the merged company. Ali Eid AlMheiri is proposed to be the Vice Chairman of the merged company. The merged company will be managed by a mix of the best talent from both companies, with a strong track record of delivering developments, knowledge of the local market and industry expertise.
The merger is subject to a number of conditions, including the approval of the merger by at least 75 per cent by value of the shares represented at quorate extraordinary general meetings (EGMs) of Aldar and Sorouh.
Under the proposed terms of the merger, the Government of Abu Dhabi and related entities will own approximately 37% of the combined company on a fully-diluted basis.
Sorouh also announced today that it is has agreed to a transaction for a total consideration of AED 3.2 billion with the Government of Abu Dhabi, that has been approved by a resolution of His Highness Sheikh Mohammed bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi and Chairman of the Executive Council. The transaction comprises reimbursement by the Government for certain infrastructure assets (AED 1.6 billion) and the purchase by the Government of units in The Gate development (AED 1.6 billion).
Aldar Chairman Mr. Ali Eid AlMheiri said: “I am delighted to confirm the board’s recommendation to merge Aldar with Sorouh. The two companies are an excellent fit. They bring together complementary assets and capabilities, diversified portfolios and an enhanced asset base and balance sheet to create a stronger entity that is best positioned for sustainable growth.” Mr. Mubarak Matar Al Humairi, Chairman of Sorouh, said: “The merger combines complementary high quality assets and strong management capabilities to take the business to the next level. The merger takes place at the right time in the property cycle as it offers our shareholders, customers, business partners, and the people and Government of Abu Dhabi a strong real estate partner that will deliver sustainable growth in this exciting market for years to come.” more WAM/TF