Arkan and Emirates Steel merge to create UAE’s largest steel and building materials company

Abu Dhabi-listed construction company Arkan Building Materials has legally completed its merger with Emirates Steel, it was announced on Wednesday.

The merger comes following a shareholder vote on August 9, 2021 and the receipt of all regulatory approvals.

The deal has created the UAE’s “largest steel and building materials company” with potential for growth internationally, a statement said.

Arkan specialises in the manufacturing of building and construction products in the UAE and its 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 Abu Dhabi’s largest holding companies.

Abu Dhabi-based Emirates Steel is also part of ADQ through Senaat, and supplies the domestic and international markets with finished products including wire rods, rebars, heavy sections and sheet piles.

Under key terms of the offer, Arkan issued to Senaat a convertible instrument, which converted into 5.1 billion ordinary Arkan shares.

The transaction provides “significant revenue diversification” for the combined group and marks the first time that investors have access to a steel producer on a UAE public market, the statement said.

“The group is well placed to scale and grow, create new business opportunities and ensure that homegrown manufacturers are at the forefront of driving a sustainable, diversified national economy,” it added.