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Monday, April 22, 2024

Top Abu Dhabi firms propose Dh44 billion mega merger in the UAE

In a significant development, Abu Dhabi’s ADQ and IHC Capital have put forward a proposal for a massive merger in the UAE, estimated to be worth Dh44 billion. The proposed merger aims to combine ADQ’s full ownership of Abu Dhabi National Exhibitions Company (Adnec) and its majority ownership interest in Modon Properties, along with IHC Capital’s entire interest in Modon, into a newly-formed entity called Q Holding.

Upon the successful closure of the proposed transaction, Q Holding is expected to have an implied market capitalization of approximately Dh44 billion (approximately $12 billion). The new entity would boast an extensive and diverse portfolio, encompassing a wide range of real estate developments, venues, land plots, and hospitality assets, further solidifying its position as a key player in the region’s business landscape.

Under the terms of the proposed merger, Q Holding would issue a convertible instrument to ADQ and IHC Capital. This instrument would later convert into approximately 9,491 million ordinary shares in the capital of Q Holding, at a conversion price of Dh2.70 per share.

The offer indicates an equity valuation of around Dh18.5 billion for Q Holding. Following the successful completion of the merger, ADQ and IHC Capital are expected to hold significant ownership stakes in Q Holding, with approximately 38.7% and 19.4% of the entire issued share capital, respectively.

The visionary leaders behind this proposed merger firmly believe that bringing together such critical real estate and hospitality assets will create an Abu Dhabi champion that will fuel the city’s ambitions.

The combined assets are expected to benefit from increased scale, improved operational synergies, and new revenue opportunities, positioning Q Holding for robust future growth in a competitive and dynamic market.

Commenting on the proposal, Mohamed Hassan Alsuwaidi, UAE Minister of Investment and MD and CEO at ADQ, expressed his belief that the merger presents a unique opportunity to generate exceptional value, aligning key assets to drive strategic growth for Abu Dhabi.

Syed Basar Shueb, CEO and managing director of IHC, shared this sentiment, envisioning the merger as a strategic alignment that will not only amplify their capacity for real estate development but also effectively bridge the gap between the tourism and real estate sectors, both poised for further growth and expansion.

While the proposal marks a pivotal milestone in the region’s business landscape, it is important to note that the completion of the transaction is subject to the approval of shareholders and regulatory authorities.

The boards of ADQ and IHC Capital, along with the board of Q Holding, will be closely evaluating the proposal, and their recommendations will play a significant role in determining the future of this ambitious and transformative merger.

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