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Bloomberg
Immofinanz AG and CA Immobilien Anlagen AG plan to merge in a transaction that would create the biggest commercial property group in central and eastern Europe, following a hostile takeover battle that ended without a deal last year.
Immofinanz agreed to buy a 26 percent stake in CA Immo from Russian billionaire Boris Mints’s O1 Group Ltd. in a first step to a full merger, the company said in a statement on Monday. Immofinanz will sell or spin off its five Russian shopping malls before combining with CA Immo to create a company with real estate assets of about 6 billion euros ($7 billion) in Austria, Germany and several eastern European countries.
“The merger makes absolute sense†for the companies, because they have similar assets and the deal allows them to cut costs, said Thomas Neuhold, an analyst at KeplerCheuvreux in Vienna. Whether the merger appeals to shareholders will depend on the price, he said.
CA Immo and Immofinanz both failed last year with rival bids to buy a stake in each other after an acrimonious takeover battle between Vienna’s two biggest commercial property developers. After the battle ended almost a year ago, key shareholders said at the time they remained interested in working together.
While CA Immo’s portfolio is focused on office space in Germany and Austria, Immofinanz also has a large presence in eastern Europe. Its Russian shopping malls, with a net asset value of about 500 million euros, have been hurt by the weak economy and the decline of the ruble.
The companies will achieve about €33 million of annual cost savings through the merger, Immofinanz said at a press conference.
In the statutory merger, both companies’ shareholders will become owners of the combined group.