UAE-based leading construction and building materials firm Arkan Building Materials Company’s board of directors agreed to proceed with a strategic transaction to acquire Emirates Steel Industries, the leading integrated steel manufacturer in the Middle East region.
Under the terms of the proposed deal, Senaat will transfer Emirates Steel to Arkan in exchange for a convertible instrument that will automatically convert into approximately 5.1 billion ordinary Arkan shares after the agreement is completed.
Following the conversion, Senaat would own 87.5 percent of the entire issued share capital of Arkan. The deal was announced in May this year.
Arkan said that the proposed transaction will create a listed national champion in the building materials and construction sectors, with strong potential for growth in the UAE and internationally.
“As the world recovers from the repercussions of the “COVID-19” pandemic, Arkan spares no effort to seize the emerging opportunities in the building and construction materials sectors. The acquisition of Emirates Steel accelerates our ambitions by uniting the businesses of two of the most prominent companies in the sector in the UAE, and thus helps expand our product portfolio and significantly increase our sales. The deal augurs well for achieving a rewarding cumulative value for Arkan’s shareholders. It enhances both the balance sheet and financial performance of the company, expands the scope of its international business, and provides the necessary ingredients for it to become a platform for investment in a major regional sector, and to play a major role in the UAE’s industrial strategy the 300 billion project.”
“The combined entity will be optimally positioned to benefit from the post-COVID recovery anticipated in the UAE’s and the region’s construction sectors, thanks to an expected acceleration in infrastructure projects as a result of various government stimulus programs locally and regionally,” according to the company statement.