South-African investment fund New Europe Property Investments (NEPI), the largest real estate investor in Romania by asset value, has signed on Tuesday a framework agreement to merge with Rockcastle, another South-African fund with similar businesses operating in Poland.
The new company will be named NEPI Rockcastle and is to be established by an exchange of shares, i.e. 4.5 Rockcastle shares for one NEPI share, according to a joint release of the two companies. The merger is to be concluded by June 30, 2017 at the latest, capital.ro informs.
NEPI’s market capitalisation is of about EUR 3.4 billion, whereas Rockcastle’s amounts to EUR 2.2 billion. Following the merger, the two companies estimate to have formed the largest real estate company in Central and Eastern Europe and one of the largest real estate retail companies in Europe.
Alexandru Morar and Spiro Noussis, the NEPI and Rockcastle CEOs, will be appointed as joint Executive Directors General of the newly set company, while Dan Pascariu will be appointed as chairman of the independent non-executive board.
NEPI owns many properties in Romania and has expressed its intention to expand in the region, as it also owns assets in Slovakia, Serbia and the Czech Republic. Overall, the company’s assets amount to EUR 2.5 billion. Rockcastle has most of its properties in Poland with assets amounting to EUR 1.7 billion.
Following the merger, the expanding plans might be accelerated, as NEPI envisages the building of three new shopping malls in Ramnicu Valcea, Satu Mare and Novi Sad (Serbia) and to expand the operating projects such as Promenada Mall in Bucharest and the retail parks in Braila, Drobeta-Turnu Severin, Galati and Sibiu.
The two companies have common shareholders such as Prudential, Sanlam, BlackRock Fund Advisors (former Barclays Global Fund Advisors) and Stanlib.