Indiabulls Real Estate and two subsidiaries of Embassy Group have entered into a definitive agreement to merge their residential and commercial projects across markets to create one of the largest property development platforms in the country.
The combined entity will hold both the developers’ ongoing, completed, but unsold and planned projects, with 80.8 million sq ft of development potential. This exercise will mark Indiabulls Group’s exit from real estate business.
As an existing investor in both the companies, certain entities controlled by Blackstone Group have also submitted a non-binding letter of intent for participation in this amalgamation. The proposed merger will be achieved through a cashless structure as Embassy subsidiaries — NAM Estates and Embassy One Commercial Property Developments — will swap shares with Indiabulls Real Estate.
As per the terms approved by boards of both merging entities, Indiabulls Real Estate shares are valued at ₹92.5 per share, a 25.7% premium to Tuesday’s closing price. Shareholders of Embassy subsidiary NAM will get 6.619 shares of Indiabulls Real Estate for every 10 shares of NAM, while NAM Opco shareholders will get 5.406 shares of Indiabulls Real Estate for every 10 shares in NAM Opco.
“This integration provides scale to our two organisations and allows the stakeholders to capitalise on the opportunity created by the market consolidation and dislocations. The transaction also offers growth to the listed entity by combining a portfolio of well-located commercial projects across Mumbai, NCR and Bangalore, which has seen the largest absorption in office space over the past five years,” said Jitendra Virwani, chairman, Embassy Group.