London-listed Kennedy Wilson Europe Real Estate is merging with its US-based parent company.

Kennedy Wilson Europe Real Estate, which invests in direct real estate and real estate loans in Europe, will become a wholly-owned subsidiary of New York-listed Kennedy Wilson Holdings.

The merger will create a real estate investment and asset management platform with a combined market capitalisation of around $4bn (€3.68bn).

The transaction is expected to close in the third quarter of this year.

William McMorrow, chairman and chief executive of Kennedy Wilson Holdings, said: “This transaction represents one of the most significant milestones in our 40-year history.

“The combination will create a leading global real estate investment and asset management platform with enhanced diversification supported by the continuity of leadership with a strong, proven track record.”

McMorrow said the enterprise will benefit from “greater scale and improved liquidity, which will enhance our ability to generate attractive risk-adjusted returns”.

Kennedy Wilson Europe shareholders will own around 36% of the enlarged business, with 64% to be owned by Kennedy Wilson Holdings shareholders.

Kennedy Wilson currently has 400 staff in the US and around 100 in Europe.