Aldar HQ in Abu Dhabi
Aldar raises synergy estimate from Sorouh merger
Abu Dhabi, March 4, 2014
Abu Dhabi-listed developer Aldar Properties has raised its estimate of the value of synergies from its merger with another property firm, Sorouh, by 45 per cent to Dh145-150 million ($39.5-40.9 million) annually.
The company’s initial per annum synergy estimate of Dh90-110 million by 2015 was derived principally from operational efficiencies and interest savings on acquired debt, it said in a statement on Tuesday.
The figure has been revised "based on stronger than expected operational synergies and revised lower cost of debt acquired in the acquisition, a significant proportion of which will start to be realised in 2014."
Abubaker Seddiq Al Khoori, chairman of Aldar Properties said: “The 45 per cent increase in synergy estimates and the ability to complete the merger integration well ahead of schedule reinforces the complementary nature of the two businesses. I am confident that we now have the right team and business processes in place to maximise stakeholder value by creating and managing quality developments.”
Aldar’s chief strategy officer Paul Warren said: “This was an extremely complex integration of two very large businesses, and the ability to extract so much value from the integration is a testament to the hard work and commitment of the teams who have been working together. Key to the success of the integration has been the development of a detailed strategy to drive the growth of the merged business with the aim of becoming the most trusted and recognised developer in Abu Dhabi.”
Aldar’s chief financial officer Greg Fewer said: “We are pleased that the capital markets have reacted so positively to the merger and Aldar’s cost of capital is lower as a result.”
“We have reduced our overall interest expense significantly and together with the improved operational efficiencies we have created real value for our shareholders,” he added. – TradeArabia News Service & Reuters