CapitaLand entered a deal with Temasek’s Ascendas-Singbridge, or ASB, to acquire two subsidiaries in a deal valued at S$11 billion, it said in a filing to SGX before the market open on Monday.
The two subsidiaries are Ascendas Pte., or APL, and Singbridge Pte., or SB, which are the holding companies of ASB, the filing said. APL holds the business space and industrial development platforms and the fund management platforms, while SB holds the joint ventures for large-scale urban development projects, the filing said.
The deal would create the largest diversified real estate group in Asia, based on publicly available assets under management data, and among the top 10 real estate investment managers globally, based on IPE data, the companies said. It would have assets in more than 180 cities across 32 countries, the statement said.
Under the proposed deal, CapitaLand will acquire effective control of Ascendas Funds Management (S), which is the manager of Ascendas REIT, Ascendas Hospitality Fund Management, which is the manager of Ascendas Hospitality REIT, which is in turn part of Ascendas Hospitality Trust, and Ascendas Asia Real Estate Fund Management, the filing said.
CapitaLand’s combined total assets under management would exceed S$116 billion after the deal, with the expanded asset classes to include logistics/business parks, industrial, lodging, commercial, retail and residential, it said.
The Singapore-listed company would become the manager of the three largest REITs listed on SGX: Ascendas Real Estate Investment Trust, or Ascendas REIT, CapitaLand Mall Trust, and CapitaLand Commercial Trust, it said.
Lee Chee Koon, president and CEO of CapitaLand, said the deal would expand its foothold in its core Singapore and China markets, while adding “meaningful scale” in the U.S., India and Europe.
“This deal immediately adds a portfolio of operating assets that contribute income today, while adding a sizeable pipeline of development projects for the future,” Lee said in the statement.
Under the agreement, Singapore state-owned investment fund Temasek will effectively receive S$6.0 billion, with 50 percent in cash and 50 percent in new CapitaLand shares priced at S$3.50 a share, a premium of 11.3 percent over the one-month volume weighted average price of S$3.1447, the filing said. The shares ended Friday at S$3.27.
That would boost Temasek’s stake in CapitaLand to around 51.0 percent from around 40.8 percent currently, the filing said.
The deal will require approval from the Monetary Authority of Singapore and is subject to approval by CapitaLand shareholders at an extraordinary general meeting (EGM), which is expected to be held by the first half of 2019, the filing said.
The transaction will trigger an obligation for Temasek to make a mandatory general offer for the CapitaLand shares it doesn’t already own, but it will seek a resolution at the EGM to waive the requirement, it said.
The deal is expected to be completed by the third quarter of 2019, it said.
This article was originally published on Monday, 14 January 2019 at 8:21 A.M. SGT; it has since been updated.