- Transaction will create a leading regional player in the building materials sector, well-positioned to capitalise on growth opportunities in the Middle East
- The transaction is subject to regulatory approvals and both entities will continue to operate separately until the closing of the transaction later this year
Abu Dhabi, UAE: – Arkan Building Materials Company PJSC (“Arkan”), a leading construction and building materials company in the UAE, announced that at a virtual General Assembly held today, shareholders overwhelmingly approved the proposal for the strategic combination of Arkan and Emirates Steel Industries PJSC (“Emirates Steel”), the Middle East’s leading integrated steel manufacturer.
The transaction will create a listed national champion in the building materials and construction sector with strong potential for growth in the UAE and internationally.
Emirates Steel is owned by General Holding Corporation PJSC (“Senaat”), part of ADQ. ADQ is one of the region’s largest holding companies.
The key terms of the strategic combination, proposed in May by Senaat, are to transfer Emirates Steel to Arkan in consideration for the issuance by Arkan to Senaat of a convertible instrument. Upon closing 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.
HE Eng. Jamal Salem Al Dhaheri, Chairman of Arkan, said: “We are pleased to have received the support of our shareholders to move forward with the strategic combination of Arkan and Emirates Steel. The transaction will offer investors access to a national and regional champion in the building materials and construction sector, that is well placed for opportunities that emerge from the economic recovery that lies ahead.”
“The combined group will benefit from a strengthened balance sheet and operational scale. In particular, it will play a key role in supporting the sustainable economic growth targets outlined in the UAE’s Industrial Strategy ‘Operation 300 Billon’, building on Emirates Steel’s position as a leading industrial player that adopts the latest technologies in steel production, quality control and sustainability practices.”
The combined group will also be ideally positioned to benefit from the post-Covid recovery anticipated in the UAE’s and the region’s construction sectors, particularly in light of the stimulus packages being introduced by the UAE Government and other regional Governments to accelerate infrastructure projects.
The transaction is expected to close later this year, until then, both companies will continue to operate independently.
For further information, please contact:
Phone: +971 (0)2 234 4600 / +971 (0)4 560 9600
Arkan Building Materials Company PJSC (ADX: ARKAN) is a public joint stock company specialising in the manufacturing of building and construction products in the UAE. Arkan’s vision is to build a large integrated building products business that serves the local and regional construction industries. Arkan’s portfolio companies include the Al Ain Cement Factory, Emirates Blocks Factories, ANABEEB and Arkan Dry Mortar. Through Senaat, Arkan is part of ADQ, one of the region’s largest holding companies with a broad portfolio of major enterprises spanning key sectors of Abu Dhabi’s diversified economy.
For more information, please visit our website: www.arkan.ae
© Press Release 2021