Aldar-Sorouh Tie-Up Enters Due Diligence PhaseMonday, June 11, 2012
According to sources, the two largest developers of Abu Dhabi (Aldar Properties and Sorouh Real Estate) said in a bourse filing on Sunday that the merger between them is now in due diligence phase. Both the companies have disclosed in a statement to the Abu Dhabi Securities Exchange that Morgan Stanley was advising Sorouh while Credit Suisse was advising Aldar on the merger.
The filing added that steering committees are also getting advice by Goldman Sachs and National Bank of Abu Dhabi. It also added that the due diligence process is in progress and it is expected to take several months. The potential merger between Aldar and Sorouh Real Estate was announced in March. The Abu Dhabi Government has rescued Aldar twice with bailouts totaling US$ 10 bn. After multi-million debts in 2010, Aldar reported full year net profit of US$ 175 m. With respect to the market value, Aldar is the UAE’s largest developer and is known for building several quality projects.
On the other hand, Sorouh Real Estate is the second biggest developer in the UAE. Sorouh Real Estate posted a net profit AED 83.6 m in the first quarter as compared to the profit of AED 64.3 m recorded in Q1 2011. During the quarter, the revenue has doubled to AED 967.2 m.