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Dubai: Merger of Emaar Properties, Emaar Malls approved by regulator

Issac John /Dubai
issacjohn@khaleejtimes.com Filed on September 6, 2021
Tourists takes an abra ride in front of the Burj Khalifa. Photo by Shihab

The move will reinforce Emaar Properties' position as Mena's largest integrated and diversified real estate company.


A proposed merger move initiated between Emaar Properties and Emaar Malls received the final approval of the Securities & Commodities Authority (SCA).

In a joint statement on Monday, both entities said the merger process, as disclosed on March 2, 2021, has the unanimous support and recommendation of the board of directors of Emaar Properties and Emaar Malls (acting through its independent directors).

The move will reinforce Emaar Properties’ position as Mena’s largest integrated and diversified real estate company, while ensuring that both Emaar Properties and Emaar Malls are strategically positioned to capture opportunities in the marketplace and drive shareholder value, said the statement.

The merger will help boost Emaar Properties’ financial and operational performance through full consolidation of Emaar Malls’ earnings and cash flow generation, and further reduce volatility through an increase in the proportion of earnings from recurring businesses.

“The proposed transaction, subject to satisfying the required conditions, would be effected as a statutory merger with Emaar Malls shareholders (excluding Emaar Properties) receiving 0.51 Emaar Properties shares for every one Emaar Malls share. This represents a premium of 7.1 per cent to the closing price of Emaar Malls on 1 March 2021, the last trading day prior to the merger 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 1 March 2020. This represents a premium of 3.5 per cent to the closing price of Emaar Malls on 1 September 2021 and a premium of 4.4 per cent to the market implied exchange ratio based on volume weighted average prices over the last one month to 1 September 2021,” said the joint statement.

The merger is subject to several conditions, including the approval of the merger by vote of shareholders who own at least 75 per cent of the shares represented at quorate general meetings of Emaar Properties and Emaar Malls, said the statement.

One of the world’s largest real estate companies, Emaar Properties has a land bank of 1.7 billion sq ft in the UAE and international markets.

The company has delivered over 72,100 residential units since 2002. Recurring revenue-generating assets include over 1,140,000 sqm of leasing space as well as 27 hotels and resorts with 5,895 rooms (includes owned as well as managed hotels).

Currently, 50 per cent of the Emaar Properties’ revenue is from its shopping malls and retail, hospitality and leisure and international subsidiaries.

Emaar Malls’ properties include the Dubai Mall – claimed to be the world’s most visited shopping and entertainment mall for the last five years.

The company also owns and manages Souk Al Bahar in Downtown Dubai, Dubai Marina Mall, and Gold and Diamond Park.

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

— issacjohn@khaleejtimes.com

author

Issac John

Editorial Director of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE's mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.





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