CapitaLand Ltd.-member companies CapitaLand Mall Trust and CapitaLand Commercial Trust proposed to merge to create the third-largest real estate investment trust in Asia-Pacific, with a market capitalization of S$16.8 billion and a combined property value of S$22.9 billion.
As part of the transaction, CapitaLand Mall will purchase all of CapitaLand Commercial's units at a per-unit consideration of 25.90 Singapore cents and 0.720 new CapitaLand Mall unit, according to a Jan. 22 news release.
The total consideration for the acquisition comprises approximately 88% in new CapitaLand Mall units and 12% in cash.
CapitaLand will retain a roughly 29.1% sponsor stake in the merged entity, which will be named CapitaLand Integrated Commercial Trust. It will own a portfolio of 15 malls in Singapore, as well as eight office properties across the city-state and two more in Frankfurt.
The transaction is expected to be completed by the second quarter, subject to the approval of the unitholders of the merging trusts. It follows the completion on Dec. 31, 2019, of the merger between fellow CapitaLand member companies Ascott Residence Trust and Ascendas Hospitality Trust to form a new S$7.6 billion entity that is expected to become the largest hospitality trust in Asia-Pacific.
CapitaLand Mall Trust Management Ltd., the manager of CapitaLand Mall, appointed J.P. Morgan (S.E.A.) Ltd. as its financial adviser for the merger, while Allen and Gledhill LLP is its legal adviser for the merger.
Meanwhile, CapitaLand Commercial Trust Management Ltd., the manager of CapitaLand Commercial, tapped Credit Suisse (Singapore) Ltd. to be its financial adviser and WongPartnership LLP to be its legal adviser in relation to the transaction.
As of Jan. 21, US$1 was equivalent to S$1.35.