Hong Kong-based logistics real estate firm ESR has agreed to buy 100 percent of ARA Asset Management for $5.2 billion in stock and cash and the total value of the both companies will be around $129 billion, according to media reports. This transaction will create the largest real estate asset management company in APac and third-largest in the world, as mentioned in the statement released by ESR.
In 2019, ESR went public at the Hong Kong Stock Exchange and is all set to issue $4.7 billion of consideration shares and vendor loan notes shares. The company will also pay $519 million in cash funded by a $250 million share placement to Sumitomo Mitsui Banking and $269 million in debt and internal resources. The founders of the company include billionaire executive director Shen Jinchu, along with OMERS and JD.com represent 46 percent of its ownership.
ESR chairman Jeffrey Perlman told the media, “Our vision has always been to build a leading fund manager focused on technology-enabled real estate, especially logistics and more recently data centres, on the back of major secular trends including the rapid rise of e-commerce, digital transformation and the financialisation of real estate in Asia Pacific.”
“With the acquisition of ARA, we are very excited to bring two best-in-class businesses together to form Asia Pacific’s number one real asset fund manager powered by the leading New Economy platform.”
The latest deal will merge ESR with its industrial competitor Logos while giving the company control of ARA’s private and public real estate fund management business. Following the merger, ESR will look after 11 real estate investment trusts listed on Singapore, Hong Kong and Korean exchanges.