Driving consolidation: Dubai's Emaar set to merge its malls, properties business

Subject to regulatory approvals, shareholders of Emaar Malls will receive 0.51 Emaar Properties shares for every one Emaar Malls share

  
The Dubai Mall. Image for illustrative purposes.

The Dubai Mall. Image for illustrative purposes.

Emaar/ Handout via Zawya

The board of directors of Dubai’s Emaar Properties and Emaar Malls have voted to recommend an all-share merger to their respective shareholders, the developer said in a statement on Tuesday evening. 

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.

According to the statement, the combination of Emaar Properties and Emaar Malls is expected to enhance the combined group’s position as a national real estate champion.

Emaar Properties will continue to be listed on the Dubai Financial Market (DFM).

Subject to regulatory approvals, shareholders of Emaar Malls will receive 0.51 Emaar Properties shares for every one Emaar Malls share, representing a premium of 7.1 percent to the closing price of Emaar Malls on 1 March 2021.

Shareholders of both Emaar Properties and Emaar Malls could gain as the move solidifies Emaar Properties’ position as MENA’s largest integrated and diversified real estate company, the statement said.

It is expected to boost Emaar Properties’ financial and operational performance through full (100 percent) consolidation of Emaar Malls’ earnings and cash flow generation.

The ongoing pandemic has added a huge pressure on UAE’s property sector. Emaar Properties reported a nearly 58 percent drop in net profit for 2020. Emaar posted a net profit of 2.62 billion dirhams in 2020, down from 6.2 billion dirhams a year earlier.

Commenting on the financial performance, Mohamed Alabbar, founder of Emaar, said: “Our performance in 2020 is a direct result of our ability to move quickly, adapt to new business conditions and utilise our existing resources to access new opportunities. We continue to embrace technology to help grow our business, while at the same time closely adhere to the cost discipline that helps us achieve better results in each quarter.”

“Looking ahead to 2021, we see a world of opportunities both traditional and tech-driven that will help us grow in ways and in markets that didn’t exist five or ten years ago,” he added.

(Reporting by Seban Scaria; editing by Daniel Luiz)

(seban.scaria@refinitiv.com)

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© ZAWYA 2021

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