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Mon 5 Oct 2009 04:05 PM

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Emaar sees merger taking 'reasonable time'

Merger would be one of the biggest in the Middle East, regulators looking into the deal.


Dubai's Emaar Properties said its planned merger with three state-linked firms would take "a reasonable time" as regulators look into the deal.


Investors and shareholders have been eagerly waiting for news on the merger, which could dilute their holdings, but would be one of the biggest in the Middle East.


"It will take a reasonable time from now," Ahmed al-Matrooshi, Emaar's managing director for the UAE, said on Monday on the sidelines of a property conference in the emirate, one of seven members of the UAE federation.


"It's with the Dubai Financial Market and at a federal level (UAE regulator) ... it depends on the regulatory approval," he told Reuters, without giving a timeframe.


Dubai Holding, owned by the ruler of the Gulf emirate, and the UAE's largest listed developer Emaar said in June they were in advanced talks to merge four local real-estate companies.


A joint statement at the time said the move would consolidate Emaar , which is building the world's tallest tower in Dubai, with three developers owned by Dubai's ruler; Dubai Properties, Sama Dubai, and leisure developer Tatweer.


All four are all prominent players in a sector badly hit by the global financial crisis after a six-year boom.


Emaar said on June 27 it expected the merger to be completed within about four months.


"I am not sure about the date ... each company has a lot of assets and it depends how long it will take to evaluate the assets and a fair price of the assets," Matrooshi said. Emaar is 31.2 percent owned by Dubai's government.


Property prices in the emirate – with its iconic palm fronds-shaped islands – have slumped since last year.


The slowdown has led to project cancellations worth hundreds of billions of dollars.


Matrooshi said there were "positive" signs of more activity in the secondary and primary property market, but could not give exact figures.


The developer is focusing on completing projects on its $20bn Burj Dubai development and will turn to projects in India and Saudi Arabia as it looks to boost revenue in the future.


It signed a initial agreement earlier this year to develop the world's tallest tower with Saudi billionaire Prince Alwaleed bin Talal and is in talks to finalise the deal, Matrooshi said.


Matrooshi said the Dubai property market did not need extra support from local or federal authorities, but when asked what the government should do to stimulate the property sector, Matrooshi pointed to the stuttering merger between Islamic mortgage firms Amlak and Tamweel.


The fate of a tie-up between the two Islamic finance companies has been under review by a government committee since the UAE announced in November it would merge the firms with two other state-controlled banks. (Reuters)