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Dubai: Dubai developers Deyaar and Union Properties on Tuesday denied that they were in merger talks but were unable to say if the government was looking into ordering a tie-up amid tightening liquidity.
On Monday, a news agency reported that Deyaar was mulling a $4.3 billion (Dh15.91 billion) merger with Union Properties. The report came after weeks of speculation into looming consolidation in the real estate sector and days after Dubai mortgage lenders Tamweel and Amlak said they were in talks to merge.
"There is no foundation on this. We have not talked to Union Properties; I was shocked when I read it," Deyaar Chief Executive Markus Giebel told reporters.
But answering a question on whether a merger could be government-orchestrated Giebel said: "I am not privileged to government talks."
His comments were echoed by Union Properties Chief Financial Officer Zaid Ghoul, who told Reuters that his firm was "not aware of any official discussions concerning a possible merger with Deyaar" but was not privy to government plans.
"Looking at a merger there are many aspects to consider... The business models between the two companies are different," he said.
In 2007, two Dubai banks merged, creating the country's largest lender and analysts say the impact of the global credit crunch could speed up government-encouraged consolidation to create larger companies better able to weather financing difficulties.
"This is a way of raising funds basically. This is why you are seeing companies selling out because the bigger the entities are, the stronger it will be," said Chahir Hosni, sales manager at EFG-Hermes. "Apparently there are talks, whether its going to go through or not, these things usually take time."
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