Austrian property firm Immofinanz has completed the acquisition of a 26% stake in peer CA Immo, paving the way for a merger of the two businesses and creating a new property giant focused on commercial assets in Central and Eastern Europe.
Immofinanz has bought over 25 million CA Immo shares for €604 mln from Russian-owned O1 Group at a price of €23.50 apiece.
'We met all conditions precedent in the shortest possible period of time and obtained the necessary approvals from the antitrust authorities in six countries. This acquisition creates the basis for the merger of these two companies into one of the leading property groups in Europe. Their portfolios complement each other extremely well, and we are expecting significant synergies and an increase in the attractiveness of the combined group for the capital market – and that will benefit the shareholders of both companies,' said Oliver Schumy, CEO of Immofinanz.
In a second step towards the merger, Immofinanz also plans to demerge or sell its Russian portfolio, consisting of five Moscow shopping centres with a book value of around €1.2 bn. The assets have a different 'portfolio dynamics and a higher risk profile', the companies said in a statement.
New heavyweight CEE player
If successful, the merger would create a new heavyweight in CEE with an investment portfolio valued at around €9 bn and a project development pipeline of some €2 bn. The portfolio would consist of around 3.8 million m2 of space, largely consisting of offices, which are expected to represent around 75% of the combined portfolio.
The announcement comes over a year after an initial attempt to combine the two property companies failed amid a bitter fued between the companies' two CEOs, with both Immofinanz and CA Immo dropping plans to take over the rival firm.
In April last year Immofinanz, then led by Eduard Zehetner, announced plans to buy a 30% stake in CA Immo at a price of €18.50 a share, or a total investment of €530 mln.
Earlier that same month, Immofinanz had formally advised its shareholders to turn down a €422 mln bid by CA Immo and its Russian partner, 01 Group, for a 13.5% stake in its business.
