281
281
  • Transaction / Assets
  • Seller
  • Buyer
  • € MM

Merlin Merges With Metrovacesa To Create RE Giant

22 June 2016 – El Economista

The Socimi Merlin Properties has informed Spain’s National Securities Market Commission (CNMV) that it has reached an agreement with Banco Santander, BBVA and Banco Popular to integrate Metrovacesa into its share capital and whereby create the largest Spanish real estate group in terms of assets and residential rental properties.

Under the terms of the agreement, the current Metrovacesa company will be split into three parts: one unit will hold the tertiary property business, which will be integrated directly into Merlin (including the employees); one residential arm, which will include all of the residential assets and which will be integrated into Testa, a subsidiary of Merlin; and a third structure, which will group together all of the land and developments under construction into a newly-created company.

After completing the integration, Merlin will, in turn, be split into two companies. One entity will hold the portfolio of tertiary assets (offices, shopping centres and logistics properties), which will begin life with a total surface area of 3 million sqm, an asset value of €9,317 million and the capacity to generate rental income of €450 million (p.a.). The other firm will hold all of the rental homes of the two companies, worth €980 million, which will generate revenues of around €35 million.

Santander will own 21.95% of Merlin

As a result of the integration, Santander, the current majority shareholder of Metrovacesa with a 70% stake, will hold 21.95% of Merlin’s share capital, as well as a 46.21% stake in Testa Residencial, the firm that will bring together all of the rental homes.

The agreement will give rise to the leading Spanish real estate group and one of the largest RE firms in Europe, given that it will hold assets worth €10,297 million in total, according to announcements from the two companies. The integration of the two companies comes just a day after Merlin completed its purchase of Testa from Sacyr and a few months after Metrovacesa, which is currently controlled by Santander, completed its own restructuring.

The operation is subject to approval by the respective General Shareholders’ Meetings of Merlin and Metrovacesa, which will likely take place in September, and will be executed in several phases through carve-outs and capital increases. (…).

Original story: El Economista

Translation: Carmel Drake