UAE-based Arkan Building Materials PJSC has approved the acquisition of Emirates Steel Industries.
The deal, which was confirmed in a statement on Thursday, will see the construction and building materials company acquire Emirates Steel with 5.1 billion ordinary shares at a fixed price of AED0.798 per share, for a total value of AED4.07 billion ($1.11bn).
The offer, which was submitted last month by General Holding Corporation (Senaat), part of ADQ, to combine Arkan with its wholly owned subsidiary, was reviewed by independent valuer KPMG and legal advisors White & Case.
“Following the conversion, Senaat would own 87.5 percent of the entire issued share capital of Arkan,” a statement from Arkan said.
The transaction will now be put forward to Arkan’s General Assembly and is subject to regulatory and shareholder approvals.
“Arkan is poised to capitalise on emerging opportunities in the construction and building materials sectors, as the world begins to recover from the Covid-19 pandemic. This transaction with Emirates Steel will accelerate our ambitions by combining two sector leaders in the UAE, thereby expanding our product portfolio and order book significantly,” said Jamal Salem Al Dhaheri, chairman of Arkan.
Arkan and Emirates Steel are part of ADQ, one of the region’s largest holding companies with a broad portfolio of major enterprises spanning key sectors of Abu Dhabi’s diversified economy.
“The deal has substantial value-enhancing potential, and we expect it to be accretive for Arkan’s shareholders. It will strengthen Arkan’s balance sheet and financial performance, deliver greater international scale, and position Arkan to become an entry point for investing in a key regional sector while playing a key role in the UAE’s Industrial Strategy ‘Operation 300 billon,’” Al Dhaheri added.
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