- Combination will be earnings accretive and will strengthen Arkan’s balance sheet while increasing its scale
Abu Dhabi, UAE – Arkan Building Materials Company PJSC (“Arkan”), a leading construction and building materials company in the UAE, today announced that its Board of Directors has agreed to proceed with a strategic transaction to acquire Emirates Steel Industries PJSC (“Emirates Steel”), the leading integrated steel manufacturer in the Middle East region.
The Board resolved to recommend to Arkan shareholders that they approve the offer received from General Holding Corporation PJSC (“Senaat”) on May 9th to acquire its wholly-owned subsidiary Emirates Steel based in Abu Dhabi.
The key terms of Senaat’s offer are to transfer Emirates Steel to Arkan in consideration for the issuance by Arkan to Senaat of a convertible instrument. Upon closing of the transaction, the convertible instrument would automatically convert into 5.1 billion ordinary shares in Arkan at a fixed price of AED 0.798 per share. Following the conversion, Senaat would own 87.5% of the entire issued share capital of Arkan.
Eng. Jamal Salem Al Dhaheri, Chairman of Arkan, said: “Arkan is poised to capitalize on emerging opportunities in the construction and building materials sectors, as the world begins to recover from the COVID-19 pandemic. This transaction with Emirates Steel will accelerate our ambitions by combining two sector leaders in the UAE, thereby expanding our product portfolio and order book significantly.
“The deal has substantial value-enhancing potential, and we expect it to be accretive for Arkan’s shareholders. It will strengthen Arkan’s balance sheet and financial performance, deliver greater international scale, and position Arkan to become an entry point for investing in a key regional sector while playing a key role in the UAE’s Industrial Strategy ‘Operation 300 Billon.’”
The proposed transaction would create a listed national champion in the building materials and construction sectors, with strong potential for growth in the UAE and internationally. The combined entity will be optimally positioned to benefit from the post-Covid recovery anticipated in the UAE’s and the region’s construction sectors, thanks to an expected acceleration in infrastructure projects as a result of various governmental stimulus programmes locally and regionally.
The transaction will now be put forward to Arkan’s General Assembly and is subject to regulatory and shareholder approvals.
© Press Release 2021
Disclaimer: The contents of this press release was provided from an external third party provider. This website is not responsible for, and does not control, such external content. This content is provided on an “as is” and “as available” basis and has not been edited in any way. Neither this website nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this press release.
The press release is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Neither this website nor our affiliates shall be liable for any errors or inaccuracies in the content, or for any actions taken by you in reliance thereon. You expressly agree that your use of the information within this article is at your sole risk.
To the fullest extent permitted by applicable law, this website, its parent company, its subsidiaries, its affiliates and the respective shareholders, directors, officers, employees, agents, advertisers, content providers and licensors will not be liable (jointly or severally) to you for any direct, indirect, consequential, special, incidental, punitive or exemplary damages, including without limitation, lost profits, lost savings and lost revenues, whether in negligence, tort, contract or any other theory of liability, even if the parties have been advised of the possibility or could have foreseen any such damages.
