By Dania Saadi
New firm will have total assets of QR30bn ($8.25bn), Barwa Real Estate says.
Qatar's Barwa Real Estate said on Thursday it will close a merger with Qatar Real Estate Investments Co. (Alaqaria) in 4-6 months and the new firm will have total assets of QR30bn ($8.25bn).
"We expect the merger to take place within four to six months," Tamer Khedr, Barwa's chief financial officer and acting president of financial services, told Reuters. "The combined total assets will not be less than QR30bn." Qatar's government ordered the two companies to merge in January as part of efforts by Gulf Arab states to help their firms weather the global economic downturn. Domestic real estate developers in the region are shedding jobs and cancelling projects as property prices drop and credit tightens.
Barwa, which is an affiliate of state-owned Qatari Diar, and Qatar Real Estate, in which the government owns a minority stake, currently have a combined market capitalization of $1.8bn, according to Reuters data. "Qatar Real Estate has lots of assets and a very steady cashflow, which mainly comes from its contracts with Qatar Petroleum," Tamer Khedr, Barwa's chief financial officer, said.
Khedr said it was too early to tell whether the merger will be a share or a cash deal. Qatar Real Estate has appointed JP Morgan as the financial adviser for the proposed merger. The proposed merger is the latest in a series of deals in Qatar, the world's largest exporter of liquefied natural gas (LNG). Qatar's Ezdan Real Estate Co., the country's largest property developer by market capital of around $2.6bn, said on March 29 it is eyeing a merger with the Group of International Housing Co. (Reuters)