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UPDATE 1-Abu Dhabi property firms say in advanced merger talks
January 9, 2013 / 6:12 AM / in 5 years

UPDATE 1-Abu Dhabi property firms say in advanced merger talks

* Aldar, Sorouh say board to decide on merger in due course

* Says merger talks “continue to progress” (Adds details)

Jan 9 (Reuters) - Abu Dhabi’s top two developers Aldar Properties and Sorouh Real Estate said on Wednesday discussions involving a state-backed merger between the two firms were at an advanced stage.

In separate statements to the Abu Dhabi bourse, Aldar and Sorouh said recommending the merger would be taken by their respective boards in due course and that talks “continue to progress”. The companies made similar statements in November.

The two state-backed firms have been in talks since March 2012 and sources told Reuters on Tuesday that the companies had reached an initial agreement to merge via a share swap.

Aldar and Sorouh have a combined market capitalisation of about 10 billion dirhams ($2.7 billion), which would make the proposed merger one of the biggest conducted by listed firms in the Middle East.

The merger would create a state-backed company with combined assets worth nearly $15 billion, and could help to repair Abu Dhabi’s weak real estate market by ensuring better coordination of new property developments.

Aldar shares were down 1.9 percent at 0600 GMT, with Sorouh falling 3.8 percent. Both made double-digit gains on Tuesday following the Reuters report that a preliminary merger deal had been reached. (Reporting by Praveen Menon and Matt Smith; Editing by Dinesh Nair)

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