(MENAFN) Aldar Properties and Sorouh Real Estate, Abu Dhabi's top developers, have officially announced a long anticipated merger, Reuters reported.
The merger will create a USD15 billion entity, the second largest listed property developer in the UAE, and could help to stabilize the emirate's struggling real estate sector.
According to the joint statement, Sorouh shareholders would receive 1.288 Aldar shares for every share in Sorouh, which will be delisted once the merger, which is subject to shareholder approval, is completed.
The two companies said that the tie-up will produce a stronger and more diversified company to take advantage of future opportunities in Abu Dhabi and other regional markets in the coming years.
From its side, Sorouh said the merger will save costs of up to USD30 million per year, while the companies expect one-off integration costs of about USD16.33 million.
It added that the Abu Dhabi government would pay Sorouh USD870.98 million in exchange for some infrastructure assets and units in its The Gate development.