DOHA: Barwa Real Estate Company ("Barwa") and Qatar Real Estate Investment Company ("Alaqaria") yesterday announced the initial terms of their proposed merger. The enlarged Barwa group will be the ninth largest company on the Qatar Exchange with a market capitalisation of QR11.1 bn.
The proposed merger is endorsed by the Government of Qatar and Qatari Diar Real Estate Investment Company (Qatari Diar), which currently holds 45 percent and 27 percent of the share capital of Barwa and Alaqaria respectively, said Barwa in a news release yesterday.
Qatari Diar has confirmed its intention to approve the proposed merger and also to maintain at least a 45 percent equity shareholding in the enlarged Barwa group through a contribution of assets.
Under the terms of the proposed merger, which are still subject to final agreement and approval of the relevant regulatory bodies and the Boards of Directors of Barwa and Alaqaria, Alaqaria will become a subsidiary of Barwa.
The transaction is to be effected through an offer by Barwa to acquire the share capital of Alaqaria in exchange for shares in Barwa. Following Barwa's share acquisition, it is expected that Alaqaria will be de-listed from the Qatar Exchange. Under this proposal, each Alaqaria share will be exchanged for 1.100 shares in Barwa, based on the closing share prices as on January 7, 2010, with Alaqaria shares valued at QR36.30 per share, implying a 30.6 percent premium.
The proposed merger will further enhance Barwa's position as a leading regional real estate company by bringing together two highly complementary businesses, the company said.
The two companies have non-competing portfolios with Barwa focusing on retail, office, hospitality and residential real estate and Alaqaria on industrial housing. Furthermore, there is limited geographical overlap within Qatar with Barwa focusing on Doha, whereas Alaqaria's portfolio is spread around Doha, its suburbs and Qatar's industrial cities.
The managements of Barwa and Alaqaria expect that the increased scale will support future growth of the enlarged Barwa group.
Ghanim Bin Saad Al Saad, Chairman and Managing Director of Barwa and CEO and Managing Director of Qatari Diar, said of the move "This transaction will create a company with significant scale and depth across all real estate segments and which will continue to play a critical role in supporting the economic development of Qatar."
Sheikh Khalid Bin Khalifa Bin Jassim Al-Thani, Chairman and Managing Director of Alaqaria, said that this transaction is good news for Alaqaria's shareholders, employees, customers and other stakeholders. "By joining forces with Barwa we are creating a world class real estate business," he said. "Our combined scale will increase our exposure to Qatar's growing commercial, residential and industrial markets and allows us to compete with the best in the world on new projects, both domestically and internationally."
© The Peninsula 2010
