Aldar And Sorouh To Go Into a Dh12.61 Billion MergerWednesday, March 14, 2012
Sorouh Real Estate and Aldar properties, two renowned developers, are planning a possible merger. As of 31st December, 2011, the combined value of the assets of both the firms was Dh 13.61 billions.
Before making the final decision, a team would be set up to consider all the legal and commercial aspects of the merger, see the options and make recommendations to the both developers. The decision of setting up a team has been taken place in Abu Dhabi Exchange where shares of both the companies are listed.
Abu Dhabi government is considering restructuring of various entities in order to make them responsive to market conditions. In this regards, a study would also be conducted in coordination with the several government bodies and the completion of the study would not take more than 3 months.
After a few months of the Aldar Dh 16.8 billion bailout by its principal shareholder, this merger has been planned. Aldar has declared a net profit of Dh 642.5 million in 2011. The same company had reported a loss of Dh12.65 billion in 2010. On the other hand, the other developer, Sorouh Real Estate has reported a net profit of Dh 383.3 million in 2011 after deduction of provisions whereas in 2010, it showed a net profit of 16.2 million.
In December 2011, the net assets of Sorouh were valued at Dh 6.6 million whereas the net assets of Aldar were valued at Dh 7.093 billion, showing an increase of 67% as compared to the year before. If this merger materialises, it would be the first successful merger among the UAE real estate companies listed at public stock exchange.
According to news, shares of both the companies have increased by 8%. If this merger is successful, it can change the property landscape in Abu Dhabi, since the new entity would draw the synergies from both companies.