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Merlin & Metrovacesa Will Complete Their Merger Next Week

11 October 2016 – ABC

Next week, Merlin and Metrovacesa will finalise the merger that will give rise to the “new Merlin” – the largest real estate company in the country, with assets worth around €9,300 million. The entity will be listed on the Ibex 35 and Santander will be its largest shareholder.

“We will sign a notarial document to make the merger a reality between 20 and 23 October”, said the Chairman of the current company Merlin, Ismael Clemente, after speaking at a conference about “Brexit” organised by KPMG.

The two companies are currently finalising the integration of their management teams, personnel and property portfolios, said the man who will be the CEO of the new company, which will be chaired by Rodrigo Echenique.

Once the notarial document governing the merger has been signed, the existing company Metrovacesa will disappear, given that its office buildings and shopping centre assets will have been integrated into Merlin.

In exchange, the current shareholder banks of the real estate company will take shares in the new Merlin and will thereby become its key shareholders. Santander will be the largest shareholder of the new real estate group, with a 21.9% stake, followed by BBVA with a 6.4% stake and Banco Popular with 2.86% of the new shares.

In addition, the entities will retain their new stakes in the Socimi for the medium term at least, given that, in addition to signing a commitment to not sell their shares for six months after the merger, none of them has expressed any intention of divesting at all.

Iconic buildings

The new Merlin will begin life with a portfolio of office buildings, shopping centres and logistics centres with a combined surface area of more than 3 million sqm, worth around €9,317 million, which will generate revenues of €450 million per year.

This portfolio contains several iconic buildings, such as Torre Madrid and one of the four towers at the north of Paseo de la Castellana in Madrid.

By virtue of this operation, and in parallel to it, a new company Testa Residencial will be created, which will be the largest rental home company in the country. It will begin life with a portfolio of 4,700 homes for rent and Santander will also be its largest shareholder, with a 46% stake.

Clemente said that the firm has already filed a request to adopt a Socimi structure, with effect from 1 January 2016, with a view to analysing its eventual debut on the stock exchange.

With the final signing of the merger and the constitution of the two companies, the process that was launched in June, when the Socimi Merlin and the real estate company Metrovacesa first agreed to join forces, is now coming to an end.

Original story: ABC (by S.E.)

Translation: Carmel Drake