Dubai-listed Emaar Properties and Emaar Malls announce merger plans

Emaar Properties and Emaar Malls – both listed on Dubai Financial Market (DFM) – jointly announced plans for an all share merger on Tuesday.

Each of their boards of directors have voted to recommend an all share merger to their respective shareholders, a statement said.

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

Meanwhile, Emaar Properties will continue to be listed on the DFM.

The proposed transaction would be effected as a statutory merger and by way of a share swap, 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 March 1, 2021, the last trading day prior to the announcement.

The proposed merger has the “unanimous support and recommendation of the board of directors of Emaar Properties and Emaar Malls”, the statement said.

It will strengthen Emaar Properties’ position as “MENA’s largest integrated and diversified real estate company”.

The merger will “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 move will also “enhance Emaar Properties’ standing in regional capital markets and increase its stock liquidity on the Dubai Financial Market, while maintaining inclusion in international equity indices,” the statement added.

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.

It 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.

Meanwhile 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.