UAE property companies agree on merger

[January 23, 2013]  ABU DHABI, United Arab Emirates (AP) -- The struggling developer of Abu Dhabi's Yas Island -- the site of the city's Formula One Grand Prix -- has agreed to merge with a smaller rival in a deal that could help stabilize the recovering property sector in the United Arab Emirates.

The companies said Tuesday that Aldar Properties and smaller Sorouh Real Estate would create one of the largest listed real estate companies in the Mideast and North Africa, with more than $12.7 billion in combined total assets.

Majority owned by the Abu Dhabi government, Aldar received $10 billion in bailout aid in 2011 as the UAE faced a sharp downturn from the global economic crisis.

The merger is subject to shareholder approval.

Aldar was a key player in Abu Dhabi's growth, including its signature Yas Island project.

[Associated Press]

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