Kennedy Wilson Europe (KWE), the London-listed property firm that has built up a sizeable real estate portfolio in Dublin and the UK in recent years, is to merge with its US parent, Kennedy Wilson Holdings (KW).
The all-share merger will create a group with a portfolio of over 400 properties diversified across the US, UK, Ireland, Italy, Spain, and Japan, valued at around $8.4 bn (€7.8 bn), the companies announced on Monday. The combine will have a market capitalisation of about $4 bn.
Commenting on the rationale behind the move, William McMorrow, chairman and chief executive of KW, 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. The enterprise will benefit from greater scale and improved liquidity, which will enhance our ability to generate attractive risk-adjusted returns for our shareholders.’
The merger will see Californian-based KW, which previously held a 23.7% stake in KWE, take full ownership of the European entity.
‘The merger significantly improves our recurring cash flow profile, and, as such, we are pleased to announce our intention to increase our first quarterly dividend by approximately 12% upon completing the transaction, which demonstrates our confidence in the combination and our long-term prospects,’ added Morrow.
Charlotte Valeur, chair of KWE said: 'I and the other members of the independent committee of KWE are very pleased to announce that we have reached agreement on the terms of an all-share transaction between KW and KWE which will give KWE shareholders the opportunity to gain exposure to a diversified asset base.'
KWE carried out €435 mln of transactions in Europe in 2016, according to PropertyEU’s latest Top Investors survey. A significant deal last May saw the company acquire office buildings in Dublin and a Manchester business park for a total of €181 mln.
The merger is subject to regulatory approvals and is due to take effect in the third quarter of 2017.
