Dubai gov't denies Emaar, Nakheel merger

MERGER TALK: Alabbar (pictured) said he would welcome a merger with Nakheel. (Getty Images)

Dubai developers Emaar Properties and Nakheel are not looking at merging, the government of Dubai said late on Monday following comments by Emaar's chairman indicating he was open to a merger.

"In response to the media reports today, a spokesperson for the Advisory Council of the government of Dubai clarified that Emaar Properties and Nakheel are not considering any merger plans," the government said in a statement.

Speaking at a conference in Dubai earlier in the day, Mohamed Ali Alabbar said he would welcome a merger with Nakheel if the opportunity arose.

"Nakheel and Emaar are two separate entities, but we welcome collaboration. If there is a chance, I will welcome it," Alabbar said when asked about a possible merger of the companies, according to newswire Bloomberg.

Alabbar, also a member of Dubai's Executive Council, later told reporters there were no current plans to merge the companies.

Alabbar also said small developers in Dubai could have to consolidate to weather the global financial crisis.

"You will see more consolidation among third-party developers, who are facing lending difficulties," he was quoted as saying.

Emaar and Nakheel are two of the biggest developers in the Middle East. Emaar is building the world's tallest building, the Burj Dubai, and Nakheel has also announced plans for a one-kilometre high tower.

Nakheel, part of state-owned conglomerate Dubai World, is also building three palm-shaped islands off the Dubai coast, as well as an archipelago in the shape of the world.

Faced with growing competition from global players and the escalating global financial crisis, companies in the Middle East are looking at consolidating to help them better compete in the difficult economic climate.

Dubai-based Islamic mortgage lenders Amlak Finance and Tamweel are to merge under the government-owned Real Estate Bank, which itself is merging with fellow government-owned lender the Emirates Industrial Bank, to create the UAE's biggest home finance company.

Qatar Navigation Co. and Qatar Shipping Co. said on Monday they had been ordered to merge by the Qatar government to boost investment growth and profitability.

Emirates NBD, the largest Gulf Arab lender by assets, was formed last year in an $11.3 billion government-brokered merger between Emirates Bank International and National Bank of Dubai (NBD).

Emaar 'might' lay off staff - Alabbar
Dubai-based developer will do whatever is in best interest of shareholders, chairman says.

Alabbar: Dubai will meet all debt obligations
UPDATE 4: Emaar chairman says Dubai's total debt obligations stand at $80bn.

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READERS' COMMENTS

Alabbar: Emaar open to Nakheel merger
Posted by UK, Dubai, UAE on Monday 24 November 2008 at 16:21 UAE time

In the last few years, we saw an unprecedented and in hind sight unsustainable growth in real estate. With a host of mergers like these, the future will probably be the other extream - very little competition and field open for few large players !! Is there any "competition commission"or such an entity in UAE to decide if a meger results in monopoly or near monopoly ??

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