Emaar Malls to be merged into Emaar Properties as consolidation moves sweep Gulf

Dubai: Emaar Properties and Emaar Malls have decided to go for a merger, through an all-share deal.

The proposal has been approved by board of directors, and is being done to “reinforce Emaar Properties’ position as MENA’s largest integrated and diversified real estate company,” the Dubai developer said in a statement. It will also ensure both are “strategically positioned to capture opportunities in the marketplace and drive shareholder value”.

The merger is now subject to a number of conditions, including the approval by the shareholders of Emaar Properties and Emaar Malls.

As part of the transaction, the existing business of Emaar Malls will be reconstituted in a wholly owned subsidiary of Emaar Properties. It will continue to develop and hold a portfolio of shopping malls and retail assets.

Emaar Malls closed Tuesday (March 2) at Dh1.69, down by a fil. Emaar Properties, which will remain listed on Dubai Financial Market, was up six fils to Dh3.63.

The announcement came on the same day as Meraas made further progress in taking complete ownership of DFM-listed theme park operator DXB Entertainments. In Saudi Arabia, National Commercial Bank and Samba confirmed the combined entity will launch on April 1.

Emaar’s wishlist from merger
1. Solidify Emaar Properties’ position as MENA’s largest integrated and diversified real estate company.
2. Boost financial and operational performance through 100% consolidation of Emaar Malls’ earnings and cashflow generation, and reduce volatility through an increase in the proportion of earnings from recurring businesses.
3. Emaar Malls will be reconstituted as a wholly-owned subsidiary that will continue to develop and hold a portfolio of premium shopping malls and retail assets, with the majority of its EBITDA generated within Dubai.
4. Significantly improve Emaar Malls shareholders’ earnings profile via an uplift in earnings per share immediately post transaction and have access to Emaar Properties’ long-term growth potential
5. Streamline Emaar Properties’ organisational structure and increase the combined group’s overall resiliency.

How it will be done

Emaar Malls’ shareholders (excluding Emaar Properties) will receive 0.51 Emaar Properties’ shares for every one  share. “This represents a premium of 7.1 per cent to the closing price of Emaar Malls on March 1, the last trading day prior to this announcement, and a premium of 11.2 per cent to the market implied exchange ratio based on volume weighted average prices over the last one month to March 1,” a statement issued by the developer said.

The merger is subject to a number of conditions, including the approval by the shareholders of Emaar Properties and Emaar Malls.

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