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CapitaLand becomes Asia's largest diversified real estate group

This article is more than 12 months old

Ascendas-Singbridge acquisition makes firm 9th biggest real-estate investment manager globally

CapitaLand is acquiring Temasek subsidiary Ascendas-Singbridge (ASB) in a deal valued at $11 billion, including debt, to create Asia's largest diversified real estate group.

After the transaction, the group's combined total assets under management (AUM) will exceed $116 billion across more than 30 countries, and cover asset classes such as business parks, and commercial, retail and residential properties.

The deal will make the combined group the ninth largest real estate investment manager globally, up from CapitaLand's current 14th place.

Mr Lee Chee Koon, president and group chief executive of CapitaLand, said: "Geographically, the deal strengthens CapitaLand's presence in our core markets of Singapore and China, while adding meaningful scale in India, the United States and Europe. This deal immediately adds a portfolio of operating assets that contribute income, while adding a sizeable pipeline of development projects for the future."

CapitaLand group chief financial officer Andrew Lim said the proposed deal will allow it to "compete globally for blue chip capital partners and funding".

Under the terms of the agreement, Temasek will receive $6 billion -half in cash and half in new CapitaLand shares, boosting Temasek's ownership of CapitaLand from around 40.8 per cent to about 51 per cent.

The new CapitaLand shares will be priced at $3.50 apiece, representing a premium of 11.3 per cent, over CapitaLand's one-month volume-weighted average price of $3.1447.

Ascendas and Singbridge have a combined enterprise value of some $10.9 billion, comprising $6 billion of equity value and $4.9 billion of net debt and minority interest.

The deal is expected to be completed by the third quarter of this year. It will have to be approved by CapitaLand's independent shareholders at an extraordinary general meeting by the first half of this year.

Gibson Dunn & Crutcher partner Robson Lee noted that Temasek will remain the single largest shareholder of CapitaLand after the deal, with the right to appoint management.

"The difference is that the risks and rewards of Temasek's equity stake in CapitaLand will increase post-merger," he said.

The deal would strengthen Temasek's ability to undertake mega township projects in developing countries, he said, with CapitaLand, Surbana Jurong, Sembcorp Development and Keppel Land in its stable of subsidiaries.