x Abu Dhabi, UAEMonday 24 July 2017

What's in a name? Nothing for Sorouh says Aldar after mega-merger

Aldar will drop the Sorouh name following the US$15bn merger of the two companies that is set to complete by the end of the month. The two firms have reshaped Abu Dhabi's skyline.

The name of Abu Dhabi's second biggest developer Sorouh will disappear after its merger with Aldar. Jaime Puebla & Delores Johnson / The National
The name of Abu Dhabi's second biggest developer Sorouh will disappear after its merger with Aldar. Jaime Puebla & Delores Johnson / The National

Aldar will drop the Sorouh name following the US$15 billion merger of the two companies that is set to be completed by the end of the month.

The action represents the start of a new life for the two companies that have reshaped the Abu Dhabi skyline over the past eight years with a string of major housing schemes, office blocks and shopping centres.

The disclosure was made in a joint statement posted on the Abu Dhabi Securities Exchange yesterday.

"Aldar and Sorouh have now applied for approval of the proposed merger and certain related matters from the Abu Dhabi Executive Council," the companies said in the filing.

Once that happens, they will apply for a resolution from the Minister of Economy to declare the merger effective. That is expected to take place any time between Wednesday and June 30.

Aldar and Sorouh have been behind some of the biggest property developments in the capital. Aldar built the Formula One Yas Marina Circuit and Central Market developments, while Sorouh has spearheaded projects such as Reem Island's Sun and Sky Towers.

Both companies were hard hit by the 2008 global financial crisis and ensuing property crash that forced them to cut jobs and delay some projects.

The merger comes at a crucial time for the Abu Dhabi property industry, which slowed dramatically in the wake of the crisis but which is now witnessing significant development activity, helped by increasing levels of government infrastructure spending.

"Abu Dhabi may not see a full recovery in 2013 but the Government is taking the right steps for a sustainable recovery," wrote Craig Plumb, the regional head of research for Jones Lang La Salle in the broker's first-quarter report on the Abu Dhabi property market. "Recent capital injections into infrastructure will boost the demand for real estate in the longer term, as will requirements for government employees to live in the emirate," said Mr Plumb.

From as early as next week, both companies will be known as Aldar Properties, rather than Aldar Sorouh Properties that had been their working name ahead of the proposed merger.

 

scronin@thenational.ae