DUBAI Jan 8 Abu Dhabi's two biggest real estate
developers have reached an initial agreement to merge, and a
final deal is expected to be signed in coming weeks, three
sources familiar with the matter told Reuters.
Aldar Properties and Sorouh Real Estate
have a combined market capitalisation of about 9.3 billion
dirhams ($2.5 billion), which would make the proposed merger one
of the biggest conducted by listed firms in the Middle East.
The merger would create a state-backed company with combined
assets worth nearly $15 billion, and could help to repair Abu
Dhabi's weak real estate market by ensuring better coordination
of new property developments.
With the support of the Abu Dhabi government, which owns a
major stake in Aldar, managements of the two companies have held
discussions for nearly a year on asset valuations, financial
terms and the new management structure, the sources said.
The merger will be based on a share swap and will not
involve a cash payment, two sources said. The terms of the share
swap could not be confirmed.
The sources spoke on condition of anonymity because the
matter has not been made public. Aldar and Sorouh declined to
(Editing by Andrew Torchia)