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The proposed combination promises to create substantial value by consolidating resources and operations, forming a larger and more efficient entity with an optimized cost structure. Image Credit: Afra Mubarak Al Nofeli/Gulf News

Abu Dhabi: ADQ, an investment and holding company based in Abu Dhabi, and IHC Capital submitted a joint proposal to Q Holding, to merge ADQ's complete ownership of Abu Dhabi National Exhibitions Company (ADNEC) and its majority stake in Modon Properties with IHC Capital's entire interest in Modon, all to be combined into Q Holding. This move, announced on Wednesday, is intended to establish a dominant player in the region's real estate, hospitality, events, catering, and urban development sectors.

The potential merger is seen as a strategic step that would enhance Abu Dhabi's status as an integrated real estate and hospitality leader, further supporting the emirate's economic transformation efforts. By consolidating resources and operations, the proposed combination is expected to generate substantial value, leading to a larger and more efficient entity with optimized cost structures. Furthermore, the integration of assets would offer diversification benefits, reducing industry-specific risks and securing additional investment opportunities while improving supply chain efficiencies and overall profitability.

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“This proposed offer provides a unique opportunity to generate value by bringing together key real estate and hospitality assets, creating an Abu Dhabi champion that fuels its ambitions,” said Mohamed Hassan Alsuwaidi, MD & CEO at ADQ. “The combined assets would benefit from increased scale and new revenue opportunities that will position it well for future growth.”

The resulting entity would have an implied market capitalization of around Dh44 billion (approximately $12 billion), boasting a diverse portfolio of real estate developments, venues, land plots, and hospitality assets.

“We firmly believe that the proposed transaction of consolidating Abu Dhabi’s leading tourism and real estate assets into Q holding will prove to be significantly beneficial to the growth and the development of the industry,” said Syed Basar Shueb, IHC’s CEO and Managing Director. “We envision this as a strategic alignment that will not only magnify our capacity for exceptional real estate development but also effectively bridge the gap between tourism and real estate sectors that is poised for further growth and expansion.”

As part of the proposed transaction's closing, Q Holding will issue a convertible instrument to ADQ and IHC Capital. This instrument will be converted into approximately 9,491 million ordinary shares in Q Holding, with a conversion price of Dh2.70 per share. The offer values Q Holding at approximately Dh18.5 billion. Following the completion of the transaction, ADQ and IHC Capital will hold approximately 38.7 per cent and 19.4 per cent, respectively, of the entire issued share capital of Q Holding.

The benefits of this combination would be directly available to public investors.

If the Board of Q Holding recommends proceeding with the transaction, it will be subject to shareholder and regulatory approvals.