Emaar calls of merger talks

Emaar, a Dubai's leading real estate developer said that it was breaking off merger talks with three of it competitors. The company, 32 per cent owned by the government of Dubai and the developer of Burj Dubai, the world’s tallest building, is a key indicator stock of the Dubai Financial Market. Its shares surged 15 per cent to hit their maximum daily limit while Arabtec, a major contractor, also gained strongly.

Emaar said on Wednesday that it was calling off talks with the real estate subsidiaries of Dubai Holding, a conglomerate owned by Sheikh Mohammed bin Rashid Al Maktoum, the emirate’s ruler, on the grounds that a merger was uneconomic. Emaar, the biggest developer in the United Arab Emirates, yesterday said the merger was no longer “economically viable.” The plan to combine with Dubai Properties LLC, Sama Dubai LLC and Tatweer LLC was announced in June. “The decision follows intensive feasibility studies that were undertaken by a group of international experts and economic analysts, under the supervision of officials of both organizations,” the statement said.

Investors took this as a sign that the real estate developer would not be included in a restructuring exercise that so far includes a nominal $26billion in assets of another government-controlled conglomerate.