By Ehab Farouk

CAIRO, Aug 8 (Reuters) - Naeem Holding for Investments SAE will merge its Reacap Financial Investments SAE with real estate group Wadi Degla Developments, creating a company with a book value of 3.5 billion Egyptian pounds ($197.18 million), Naeem Holding CEO Youssef Al Far said on Tuesday.

Under the deal, Wadi Degla will have a 74 percent stake in the new entity, while Naeem Holding will have 26 percent, Far, speaking at a news conference in Cairo, said.

The merger deal, announced after the stock market closed on Tuesday, aims to combine Reacap's mainly administrative activities with Wadi Degla's real estate business and to expand its investment portfolio.

Far said the merger would be executed via a Reacap Financial Investments capital increase of about 300 million shares at a fair value of 11 pounds per share.

Reacap, which is listed on the Cairo bourse, has a total capital of 500 million pounds.

The merger is expected to be completed by the end of the year, with the new board to decide on whether to retain the name Reacap Financial Investments or not, Far told Reuters.

Wadi Degla Chairman Maged Helmy said the real estate portfolio of the new company would stand at 6 million square metres, with 2 million of that still undeveloped and 4 currently under development.

($1 = 17.7500 Egyptian pounds)

(Reporting by Ehab Farouk; Writing by Eric Knecht and Arwa Gaballa. Editing by Jane Merriman) ((arwa.gaballa@thomsonreuters.com; +20 2 2578 3290;))