Embassy Group to amalgamate realty assets with Indiabulls Real Estate

The merger with Indiabulls will strengthen Embassy Group’s presence across locations in the country

Embassy Group, Indiabulls Real Estate, REIT, Realty developers, Sameer Gehlaut, Jitendra Virwani, Blackstone Group, HDFC Property Ventures, Merger, Mumbai, Bengaluru, National Capital Region

Realty developer Embassy Group has proposed to merge real estate projects with Indiabulls Real Estate under a deal that will see the Indiabulls Group’s exit from realty business.

The definitive agreement for the merger is expected to be placed before the listed company's board by 15 August 2020.

As per the plan, Embassy Group’s 62 million sq-ft real estate assets will be merged with the Indiabulls Real Estate’s 31 million sq-ft assets under development.

After the merger, Indiabulls’ promoter Sameer Gehlaut will hold less than 10% in the combined company, whereas Embassy Group Chairman Jitendra Virwani and other promoters will own about 30% and institutional investors around 35%.

As part of the merger, institutional investors including the private equity company, Blackstone Group and a fund of HDFC Property Ventures will also become key shareholders. Moreover, Blackstone will also be infusing fresh funds.

Both entities already hold stakes in Embassy’s projects which will be merged with Indiabulls Real Estate.

Post-merger, Embassy’s Virwani and its other promoter entities will become new promoters of the amalgamated company.

The merger with Indiabulls will strengthen Embassy Group’s presence across locations in the country. It will also create a platform for future development in partnership with institutional investors.

The merger of Indiabulls Real Estate with Embassy Group had progressed into the final stage, concluding the due-diligence and commercial discussions.

The merged entity will be the development arm for the Embassy Group, and provide a mechanism to seed assets to their Embassy-Blackstone REIT. Presently, REIT has a market cap of more than Rs 26,000 crore.

The new entity is aiming to solidify its presence as a real estate development platform with a focus on metro cities including Mumbai, Bengaluru and the National Capital Region.

Indiabulls Real Estate has access to a land bank of 1,900 acre and 1,424 acre Nashik SEZ, which will provide further development potential for the merged business.

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