Aldar, Sorouh to Complete Merger in June, Appoint ManagementZainab Fattah and Maher Chmaytelli
Abu Dhabi’s Aldar Properties PJSC and Sorouh Real Estate PJSC said their merger will become effective in June, creating the Middle East’s third-largest publicly traded developer.
The shareholders of the two companies today approved the merger that has the support of the government of Abu Dhabi, the wealthiest of the seven sheikhdoms making up the United Arab Emirates federation.
“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,” the companies said in a joint statement. “Aldar will then be named AldarSorouh Properties PJSC.”
Abu Dhabi is trying to revive its real estate market after values fell by more than 50 percent since the global credit crisis in 2008. The government paid $9.8 billion to bail out Aldar in 2011. It has also resumed stalled projects, bought struggling developments and commissioned new ones.
Sorouh Managing Director Abubaker Seddiq Al Khoori will be the chairman of the board of the merged company, according to the statement, which didn’t indicate who the chief executive officer will be. Mohamed Al Mubarak will be deputy chief executive officer, Greg Fewer chief finance officer, Paul Warren chief strategy officer and Gurjit Singh chief development officer, the statement shows.
Aldar CEO Sami Asad will not be part of the management when the merger is completed, a company spokesman said, asking not be identified in line with company policy. Sorouh CFO Richard Amos will stay on as an adviser until the first quarter of 2014, when he plans to retire, a company spokesman said.
Bain & Co Inc. has been hired to work on the integration of the two companies, Al Khoori told reporters in Abu Dhabi after Sorouh’s shareholders meeting.
Th merged company will have over 47 billion dirhams ($12.8 billion) in combined assets and a joint market capitalization of 10.9 billion dirhams, based on the closing share prices of Jan. 17, according to the statement.
Qatar Ezdan Holding Group and Dubai’s Emaar Properties PJSC are the largest property developers in the Middle East by market capitalization, according to data compiled by Bloomberg.