Metrovacesa and Merlin announced the biggest merger on the Spanish real estate market.
Metrovacesa and Merlin will merge to create a real estate giant with total assets worth over 9,300 million euros. Santander Bank will be the largest shareholder of the new group.
Santander, BBVA and Popular, major shareholders of Metrovacesa, have agreed to merge it with Merlin Properties.
The result of the operation will be the creation of the largest real estate group in Spain, with a gross asset value of more than 9,300 million euros, and one of the largest in Europe. The net value of the assets will amount to 4,927 million euros and its gross rental income will reach 450 million annually.
As a result of the transaction, Santander, controlling more than 70% shares in Metrovacesa, will have a 21.95% stake in the new Merlin.
The merger, pending the green light from competition and shareholder meetings of both companies, will involve split of Metrovacesa in three property units.
Metrovacesa will transfer its commercial property business to Merlin. This division is valued at 1,672 million euros and its transfer to Merlin will be effected by a capital increase of 146 million euros from the REIT and an exchange of Metrovacesa shares to shares of Merlin. Upon completion of the split, Metrovacesa shareholders will control 31.237% of Merlin.
Second, Metrovacesa will spin off Testa Residencial, in its entire residential business. This business is valued at 441.7 million euros. The current shareholders of Metrovacesa will receive 65.759% of Testa Residencial.
Metrovacesa also spin off its non-strategic assets valued at 326.49 million euros. These assets will be transferred to a new entity that will be controlled entirely by current shareholders of Metrovacesa.