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ADQ eyes Abu Dhabi National Hotels-Adnec merger

ABU DHABI, June 9, 2021

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, has submitted an offer to Abu Dhabi National Hotels Company (ADNH) for its strategic merger with Abu Dhabi National Exhibitions Company (Adnec).
 
The proposed transaction would create one of the largest hospitality, events, and catering powerhouses in the region that would enhance Abu Dhabi’s tourism and hospitality sectors and position them for the emirate’s longer-term, economic transformation, said the statement from ADQ.
 
The potential strategic combination seeks to provide greater synergies through better alignment and repositioning of key assets within Adnec’s portfolio, and is expected to be earnings accretive shortly after completion.
 
The combined group would have assets of approximately AED20 billion ($5.4 billion) as of December 31, 2020.
 
The activities of the resulting company would comprise a portfolio of 28 owned and operated hotels with a total of approximately 6,700 rooms, three large exhibition centres in Abu Dhabi, Al Ain and London (UK) as well as several catering companies and food and beverage outlets.
 
In return for transfer of the shares in Adnec to ADNH, the company would issue to ADQ a convertible instrument that would convert into 1.22 billion ordinary shares in the capital of ADNH upon closing of the transaction, said the statement from ADQ.
 
The price at which the convertible instrument will convert into shares in ADNH is approximately AED3.93 ($1) per share, it added.
 
The offer implies an equity value of approximately AED3.93 billion ($1 billion) for ADNH. Following completion, ADQ would own approximately 54.98 per cent of the entire issued share capital of ADNH.
 
Mansour AlMulla, Chief Investment Officer, Alternative Investments and Mergers & Acquisitions, ADQ, said: “This proposed merger offer provides a unique opportunity to create value by bringing together two major players in Abu Dhabi’s hospitality and events sector."
 
"The combined company would benefit from increased scale, new revenue opportunities, and an enhanced capital structure that will position it well for future growth,” he explained.
 
Following the necessary approvals, the transaction could close during the second half, he added.- TradeArabia News Service



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