Abu Dhabi property developers Eshraq and Reem in ‘advanced talks’ for merger

The merger will create the second largest listed real estate developer in Abu Dhabi

Abu Dhabi real estate companies Eshraq Properties and Reem Investments confirmed that they are currently holding “discussions at an advanced stage” for a potential merger.

If completed, the merger will create the second largest listed real estate developer in Abu Dhabi, a statement said.

As part of the plan, Eshraq will issue new shares for subscription after acquiring Reem’s entire business and assets.

The board of directors at both the companies “believe that the potential transaction is expected to be beneficial to the shareholders of both companies resulting in synergies derived from integrating their operational and financial resources and as well as combining their management experience and expertise,” the statement said.

The merger remains subject to a number of conditions, including the final agreement of specific deal terms including price as well as obtaining the required regulatory approvals.

Eshraq is being advised by Shuaa Capital (financial advisor) and Reem Investments is being advised by First Abu Dhabi Bank (financial advisor).

Eshraq, a public shareholding company with a capital of Dhs2.325bn, has a portfolio of residential, commercial and other real estate developments in Abu Dhabi and Dubai, while Reem – which was established in 2005 with a paid-up capital of Dhs1.555bn – is working on projects in the UAE capital and also owns prime development land in the emirate.

If successfully completed, the merger will be the second major one in Abu Dhabi’s real estate sector.

In 2013, Abu Dhabi’s two biggest property firms Aldar Properties and Sorouh Real Estate merged to trade as a single entity with a capital of Dhs7.86bn – making it the largest property developer in the emirate.

The report of the latest merger comes after Eshraq signed an agreement with Abu Dhabi-based investment firm Mubadala Development Company in April to explore the possibility of setting up a new real estate company in the UAE capital.

The companies have signed an agreement to assess joint venture opportunities for development, a statement said.

Read more: Abu Dhabi’s Mubadala, Eshraq Properties mull real estate JV

Also read: UAE developer Eshraq awards Dhs144m contract for Abu Dhabi project