Arkan AL Kuwait Real Estate Company and AlOula Real Estate Investment Company have announced the completion of their strategic merger, with shares being exchanged between the two companies.
"Arkan AL Kuwait" is the merging company, while "Al-Oula for Investment" is the merged company. This merger represents a significant milestone for both shareholders, as it promises enhanced value and expanded opportunities.
The purpose of the merger is to create a large real estate entity capable of competing and achieving sustainable growth in the coming years. The new entity will be able to leverage the assets and accumulated expertise of both companies, enhancing its capacity to offer innovative and diverse real estate services and products that meet the growing market demands.
The AlOula Real Estate Investment—considered a closed shareholding company—will significantly benefit from this merger, as its shareholders will receive shares in Arkan AL Kuwait Real Estate Company, which is listed on the Kuwait Stock Exchange. This allows them to participate in build-operate-transfer (BOT) projects that are exclusively available to public companies. This transformation will also enable AlOula’s shareholders to increase liquidity in their investments and access broader real estate opportunities.
Regarding the importance of this process, Yasser Al-Natur, the Executive Director of the Financial Sector at Arkan AL Kuwait Real Estate Company, confirmed that "the merger has led to an increase in the equity rights of the company's shareholders by 11 million Kuwaiti Dinars, including an increase in the issued and paid capital by 6 million, as well as a rise in the number of issued and paid shares from 251 million to 311 million, significantly enhancing our capital structure."
Al-Natur noted that "this strategic development is an important step toward consolidating the company’s financial strength and increasing its capacity for expansion, as it will enable us to enter larger and more ambitious projects and finance them more efficiently.”
He added that the valuations and exchange rates for the merger were accurately calculated by BDO and National Investments Company to ensure a fair and precise ratio for both parties, reflecting the commitment of both "Arkan" and "Al-Oula" to achieving beneficial results for both sides.
Prospects
For her part, Fatima Rzouqi, Senior Manager for Investments and Business Development, stated that "Arkan" looks forward to the future with great optimism, and this alliance will create an entity that has the capacity to significantly impact the market and achieve long-term value for shareholders, contributing to the advancement of real estate development in Kuwait. She emphasized that this merger constitutes an important strategic step aimed at enhancing competitiveness and providing new opportunities, reflecting the company's vision of building a better future for the real estate sector in Kuwait and the region as a whole.
Furthermore, Rzouqi affirmed that this merger will not be the last, revealing that the company is currently conducting studies for potential acquisitions of real estate companies in the future, further enhancing shareholder rights. She also mentioned collaboration with various government sectors to implement projects that contribute to development and benefit the state, stemming from its social responsibility towards the country and the community in which it operates. Notably, the government’s new approach focuses significantly on supporting private companies through various projects that yield great benefits for the country’s economy.
Rzouqi said, "Arkan has qualified for a project to design, manage, operate, and develop the Mubarakiah Markets, and is also seeking to participate in the development of three residential sites under the auspices of the Public Authority for Housing Welfare, in addition to studying new real estate opportunities and planning for future expansion, as Arkan is considered a leader in this field."