CapitaLand to acquire Ascendas-Singbridge in $11 bil deal

/ EdgeProp Singapore
January 14, 2019 3:17 PM SGT
CapitaLand is acquiring all the shares in two wholly-owned intermediate subsidiaries of Asendas-Singbridge (ASB), a subsidiary of Temasek. The acquisition, valued at $11 billion, will make CapitaLand the largest diversified real estate group in Asia, according to the group in a press statement on Jan 14.
The proposed transaction is subject to approval by CapitaLand’s independent shareholders at an extraordinary general meeting, to be convened by 1H2019.
Post-transaction, CapitaLand will be a behemoth with combined total assets under management (AUM) of more than $116 billion. The expanded portfolio will cover a wide spectrum of the real estate industry – from logistics/business parks, industrial, lodging, commercial, retail to residential. Its geographical presence will span 180 cities across 32 countries.
In addition, the group will leapfrog CapitaLand’s Year 2020 AUM target of $100 billion, putting it among the top 10 real estate investment managers globally. The group will also manage three of the largest real estate investment trusts (REITs) listed on the Singapore Exchange, namely Ascendas Real Estate Investment Trust (Ascendas Reit), CapitaLand Mall Trust (CMT) and CapitaLand Commercial Trust (CCT).
Under the terms of the agreement, Temasek will effectively receive $6 billion, which will be satisfied 50% in cash ($3 billion) and 50% in new CapitaLand shares ($3 billion). Temasek’s ownership of CapitaLand will increase from about 40.8% to about 51.0% upon the close of the transaction.
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.
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 UK and the US.
Over 80% of ASB’s $23.6 billion AUM is in business space, with more than half ($12.4 billion) in new economy sectors of logistics/business parks and data centres. Flagship projects include Singapore Science Park and Changi Business Park in Singapore, International Tech Park Bangalore and International Tech Park Chennai in India, as well as Dalian Ascendas IT Park and Singapore Hangzhou Science and Tech Park in China.
In Singapore, the combined entity’s AUM will grow by 40%, while in China, it will increase by 9%. The value of the group’s properties in Singapore will be worth $38.6 billion or 33% of the total AUM.
Over 100 properties in logistics/business parks and data centres will be added to the portfolio and these are expected to drive the group’s growth in the future.
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.
The transaction is expected to be completed by 3Q2019.