Abu Dhabi-based investment powerhouse ADQ has proposed establishing a diversified aviation services and MRO business through a three-way merger involving Etihad Engineering, AMMROC and GAL.
Towards this, ADQ has submitted an offer to Abu Dhabi Aviation PJSC (ADA) to combine its full 100 percent shareholding of Etihad Engineering and AMMROC, as well as its 50 percent ownership of GAL, into ADA.
The combined entity is proposed to have a focused strategic market access and commercial relationships with the world’s largest global aircraft manufacturers and OEMs.
The merger proposal is also expected to create a globally competitive aviation business headquartered in Abu Dhabi to position the emirate as a world-leading hub for aviation MRO services, logistics, supply chain and advanced engineering capabilities.
The combined group would have assets of approximately $2.6 billion (AED9.4 billion), with an extensive portfolio of aircrafts, MRO centers and hangars.
Upon closing of the transaction, ADA will issue to ADQ a convertible instrument that would convert into approximately 652 million ordinary shares in the capital of ADA.
The conversion of these instruments into shares in ADA is proposed at a price of AED6.14 per share.
The offer implies an equity valuation of approximately AED2.7 billion for ADA.
Following completion, ADQ would own approximately 59 percent of the entire issued share capital of ADA.
Mohamed Hassan Alsuwaidi, managing director and chief executive officer of ADQ, said the proposed transaction would further strengthen Abu Dhabi’s position as a world-leading centre of aviation excellence, combining the strengths of the three companies to form a global MRO and aviation services champion to capitalise on growth opportunities in the aviation industry.
“The proposed combination will provide a framework to investing in the future development of an advanced aviation ecosystem that supports the sustainable transformation of Abu Dhabi and the UAE’s economy for the long-term,” he said.
If the Board of Abu Dhabi Aviation approves the merger proposal, it will go for the shareholder and regulatory approvals.
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