SINGAPORE (Jan 14): CapitaLand is acquiring all the shares in two subsidiaries of Ascendas-Singbridge (ASB) from Temasek to create the largest diversified property group in Asia.

The proposed transaction is valued at $11 billion and is subject to approval by CapitaLand’s independent shareholders at an Extraordinary General Meeting (EGM), to be convened by 1H19.

Once the deal is completed, the combined total assets under management (AUM) of the group will exceed $116 billion. The group’s expanded asset classes will include logistics and business parks, industrial, lodging, commercial, retail and residential. Its geographical presence will span more than 180 cities across 32 countries.

In addition, the expanded group will leapfrog CapitaLand’s Year 2020 AUM target of $100 billion, putting it among the top 10 real estate investment managers globally.

Under the terms of the agreement, Temasek will receive $6 billion, which will be satisfied 50% in cash and 50% in new CapitaLand shares. The shares will be priced at $3.50 per share, representing a premium of 11.3%, or $0.36, over CapitaLand’s one-month volume weighted average price of $3.1447.

The consideration takes into account the adjusted net asset value of ASB, which includes the value of its fund management platform and the trading value of its three sponsored listed trusts. Temasek’s ownership of CapitaLand will increase from 40.8% to about 51.0% upon the close of the transaction.

ASB is Asia's leading provider of business space solutions. Headquartered in Singapore, ASB’s business presence spans 11 countries including Singapore, China, India, Australia, the United Kingdom and the United States.

Over 80% of ASB’s $23.6 billion AUM is in business spaces, more than half of which or approximately $12.4 billion, is in new economy sectors of logistics and business parks and data centres.

In the existing core market of Singapore, the AUM will grow by 40% and 9% respectively. The value of the group’s properties in Singapore will be worth $38.6 billion or 33% of the group’s AUM.

The value of the group’s properties in China will be worth $48.2 billion or 41% of the group’s AUM. This includes more than 60 million sf of development pipeline.

ASB has already built up a $2.6 billion AUM exposure in India’s business space sector and launched a-iTrust as an established vehicle to own income-producing business space assets in India.

In Vietnam, ASB’s OneHub Saigon, a 12ha business park development in Ho Chi Minh City, will also be a strategic addition to CapitaLand’s fast-growing presence in Vietnam.

As the transaction will trigger an obligation on Temasek to make a mandatory general offer for the shares in CapitaLand which it does not own, a whitewash resolution will be tabled at the EGM to seek the approval of CapitaLand shareholders to waive their right to receive the offer from Temasek.

The transaction is expected to be completed by 3Q19.

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