Senaat looks to combine Emirates Steel, Arkan into steel, materials powerhouse – MEP MiddleEast

Senaat looks to combine Emirates Steel, Arkan into steel, materials powerhouse – MEP MiddleEast

Abu Dhabi’s General Holding Corporation PJSC (Senaat), which is part of ADQ and the sole shareholder of Emirates Steel Industries PJSC (Emirates Steel), has submitted an offer to the Board of Arkan Building Materials Company PJSC (Arkan), setting out the principal terms and conditions on which Senaat would transfer Emirates Steel, a leading integrated steel producer in the Middle East, to Arkan, a construction and building materials manufacturer in the UAE.

Under key terms of the offer, in consideration for the transfer of Emirates Steel, Arkan would issue to Senaat a convertible instrument that would automatically convert into approximately 5.1 billion ordinary shares in the capital of Arkan upon closing of the transaction.

The price at which the convertible instrument will convert into shares in Arkan is AED 0.798 per share. The offer implies an equity value of approximately $381mn (AED1.4bn) for Arkan.

Post completion, Senaat would own approximately 87.5% of the entire issued share capital of the combined group.

If the Board of Arkan recommends the offer, and its shareholders subsequently approve it, then the transaction could close during H2 2021, subject to the receipt of all relevant governmental and regulatory approvals.

Rothschild & Co are acting as financial advisor and Allen