Emaar Properties and Emaar Malls to merge

Emaar Properties PJSC and Emaar Malls PJSC  jointly announce today that each of their boards of directors have voted to recommend an all share merger to their respective shareholders. The proposed merger has the unanimous support and recommendation of the board of directors of Emaar Properties and Emaar Malls (acting through its independent directors) and will reinforce Emaar Properties’ position as MENA’s largest integrated and diversified real estate company, ensuring both Emaar Properties and Emaar Malls are strategically positioned to capture opportunities in the marketplace and drive shareholder value.

As part of the transaction, the existing business of Emaar Malls will be reconstituted in a wholly owned subsidiary of Emaar Properties and will continue to develop and hold a portfolio of premium shopping malls and retail assets, and Emaar Properties will continue to be listed on the Dubai Financial Market.

The combination offers a compelling value proposition for both Emaar Properties and Emaar Malls’ shareholders and is expected to create the following benefits:

• Solidify Emaar Properties’ position as MENA’s largest integrated and diversified real estate company
• Boost Emaar Properties’ financial and operational performance through full (100%) consolidation of Emaar Malls’ earnings and cash flow generation, and further reduce volatility through an increase in the proportion of earnings from recurring businesses
• Fully incorporate Emaar Malls into Emaar Properties, a significantly larger and more diversified group, while reconstituting Emaar Malls as a wholly owned subsidiary that will continue to develop and hold a portfolio of premium shopping malls and retail assets, with the majority of its EBITDA being generated within the Emirate of Dubai
• Significantly improve Emaar Malls shareholders’ earnings profile via a substantial uplift in earnings per share immediately post transaction and access to Emaar Properties’ embedded long term growth potential
• Reinforce Emaar Properties’ robust balance sheet with its conservative loan to value ratio, while increasing the combined group’s financial flexibility and strengthening Emaar Properties’ credit profile
• Safeguard Emaar Malls’ credit strength with a neutral impact expected to its existing credit ratings by virtue of the transaction
• Streamline Emaar Properties’ organisational structure and increase the combined group’s overall resiliency and strategic alignment across its key entities
• Enhance Emaar Properties’ standing in regional capital markets and increase its stock liquidity on the Dubai Financial Market, while maintaining inclusion in international equity indices

The combination of Emaar Properties and Emaar Malls is expected to enhance the combined group’s position as a national real estate champion and will continue to contribute to the ongoing development of Dubai, acting as a critical enabler of the economic vision of Dubai and the UAE.

The proposed transaction would be effected as a statutory merger and by way of a share swap, with Emaar Malls shareholders (excluding Emaar Properties) receiving 0.51 Emaar Properties shares for every one Emaar Malls share. This represents a premium of 7.1% to the closing price of Emaar Malls on 1 March 2021, the last trading day prior to this announcement, and a premium of 11.2% to the market implied exchange ratio based on volume weighted average prices over the last one month to 1 March 2021. The merger is subject to a number of conditions, including the approval by the shareholders of Emaar Properties and Emaar Malls.