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The deal is valued at AED4.07 billion ($1.11 billion), as it will give Arkan 5.1 billion ordinary shares at a cost of AED0.798 ($0.22) each
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Once the deal goes through, Arkan’s holding company Senaat would own 87.5% of its entire issued share capital
United Arab Emirates-based Arkan Building Materials Company’s Board of Directors has agreed to proceed with the acquisition of integrated steelmaker Emirates Steel Industries, which operates in the Middle East overall, local reports quoted the former as saying on Thursday, June 24.
The deal, now one step closer to be carried through, is valued at AED4.07 billion ($1.11 billion), as it will give Arkan 5.1 billion ordinary shares at a cost of AED0.798 ($0.22) each.
It was General Holding Corporation, or Senaat, that on May 9 brought the acquisition proposal to Arkan, one of its own holdings.
Arkan’s board now plans to recommend it to its shareholders. The transaction will thus be put forward to Arkan’s General Assembly and is subject to shareholder and regulatory approvals.
Once the deal goes through, Senaat would own 87.5% of Arkan’s entire issued share capital.
The reports quoted Arkan Chairman Jamal Salem Al Dhaheri as saying about the acquisition, “This transaction with Emirates Steel will accelerate our ambitions by combining two sector leaders in the UAE, thereby expanding our product portfolio and order book significantly.”
He added: “The deal has substantial value-enhancing potential, and we expect it to be accretive for Arkan’s shareholders. It will strengthen Arkan’s balance sheet and financial performance, and deliver a greater international scale.”