Abu Dhabi state-backed investment and holding companies are consolidating assets to set up one of the largest real estate, hospitality, events, and catering platforms in the region as the oil-rich emirate pursues its strategy of diversifying away from hydrocarbons.

Investment and holding company ADQ and IHC Capital Holding LLC (IHC Capital) have submitted an offer to Q Holding PJSC, to combine ADQ’s 100% shareholding of Abu Dhabi National Exhibitions Company PJSC (ADNEC), as well as its majority ownership interest in Modon Properties PJSC, and IHC Capital’s entire interest in Modon into Q Holding.

The combined group would have an implied market capitalisation of approximately 44 billion dirhams ($12 billion) with an extensive portfolio of real estate developments, venues, land plots and hospitality assets, a statement from ADQ said on Wednesday.

Upon closing of the proposed transaction, Q Holding will issue to ADQ and IHC Capital a convertible instrument that would convert into approximately 9,491 million ordinary shares in the capital of Q Holding.

The price at which the convertible instrument will convert into shares in Q Holding is AED 2.70 per share. The offer implies an equity valuation of approximately AED 18.5 billion for Q Holding.

Following completion, ADQ and IHC Capital, which is a subsidiary of International Holding Company, would respectively own approximately 38.7% and 19.4% of the entire issued share capital of Q Holding.

Mohamed Hassan Alsuwaidi, MD & CEO at ADQ, said the proposed offer provides a unique opportunity to generate value by bringing together key real estate and hospitality assets.

"The combined assets would benefit from increased scale and new revenue opportunities that will position it well for future growth,” he said.

(Reporting by Brinda Darasha; editing by Seban Scaria)