The Dubai developer behind the world's tallest building plans to merge with three rivals owned by the sheikdom's ruler, in a consolidation aimed at better coping with a weakness in the one-time Arab boomtown's real estate sector.
In a statement posted yesterday on the Dubai Financial Market's website, Emaar Properties said its proposed merger with Dubai Holding subsidiaries Dubai Properties, Samar Dubai and Tatweer would create a company with an asset base of 194 billion dirhams (HK$409 billion) and a debt of 13.4 billion dirhams, or roughly 7 percent of the total assets.
"The proposed consolidation would create a robust and strategic asset base while joining the strengths" of the various companies, Emaar said.
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The deal marks a push to shore up a Dubai property market that has seen values plunge by as much as 40 percent in the first quarter of 2009 as the global economic meltdown hit hard.
Layoffs in Dubai's largely expatriate work force compounded the oversupply of units in the semi-autonomous city- state, squeezing prices.
The tougher financing climate also led to project delays and cancellations, and the fallout from the overall economic weakness further tarnished the image of an emirate whose famed man-made islands, soaring skyscrapers and rampant consumerism helped cast it as a rising global business powerhouse.
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