Qatari development giants agree to merger

The merger will create Qatar's ninth largest listed company.

Barwa Real Estate Company and Qatar Real Estate Investment Company have announced the initial terms of their proposed merger, which will create the ninth largest company on the Qatar Exchange with a market capitalisation of QR11.1bn (US $3bn).

Qatari Diar, which currently holds 45% and 27% of the share capital of Barwa and Alaqaria respectively, has also agreed to the deal.

"This transaction will create a company with significant scale and depth across all real estate segments and which will continue to play a critical role in supporting the economic development of Qatar, in line with the vision of His Highness the Emir, Sheikh Hamad bin Khalifa Al-Thani,” said Barwa chairman and managing director Ghanim Bin Saad Al Saad.

Under the terms of the proposed merger, Alaqaria will become a subsidiary of Barwa. Each Alaqaria share will be exchanged for 1.100 shares in Barwa, which based on the closing share prices on 7 January 2010, values the Alaqaria shares at QR36.30 per share and implies a 30.6% premium.

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“We are delighted that Alaqaria's management team have agreed to join us and look forward to closely working together to deliver on our combined objectives," continued Al Saad.

Chairman and managing director of Alaqaria, Sheikh Khalid Bin Khalifa Bin Jassim Al-Thani, added: "We believe that this transaction is good news for Alaqaria's shareholders, employees, customers and other stakeholders. By joining forces with Barwa we are creating a world class real estate business.

“Our combined scale will increase our exposure to Qatar's growing commercial, residential and industrial markets and allows us to compete with the best in the world on new projects, both domestically and internationally."