Indiabulls Real Estate Ltd has entered into a definitive agreement to merge the entire residential and commercial projects of the Embassy Group with itself.
The combined entity will constitute 80.8 million square feet of launched and planned development potential, said Indiabulls Real Estate in a stock market disclosure.
As part of the transaction, two subsidiaries of Embassy Group -- NAM Estates and NAM Opco -- will merge with Indiabulls Real Estate in a cashless scheme.
NAM Estates shareholders will get 6.619 shares of Indiabulls Real Estate for every 10 shares of NAM Estates; and NAM Opco shareholders will get 5.406 shares of Indiabulls Real Estate for every 10 shares in NAM Opco.
Post the transaction, the merged entity -- Embassy Developments Ltd -- will be owned 44.9% by the Embassy Group, 26.2% by the existing public and institutional shareholders, 9.8% by existing Indiabulls Real Estate promoter group and 19.1% by Blackstone and other Embassy institutional investors.
Certain entities controlled by Blackstone have already submitted
a non-binding letter of intent (LOI) for participation in the proposed merger.
Blackstone late last year had bought the remaining commercial projects of Indiabulls Real Estate for Rs 810 crore ($113 million).. In 2018, the private equity firm had purchased a 50% stake in two units of Indiabulls Real Estate. The deal included Indiabulls Finance Centre and One Indiabulls Centre in Mumbai, two key commercial properties in the country's financial capital.
Blackstone has been an aggressive investor in India's real estate market. It has snapped up a bunch of commercial properties lately, adding to its massive portfolio of rent-yielding properties.
The merger, which is subject to regulatory approvals, is expected to be completed by September next year.
Indiabulls group had been shedding its real estate business as it planned to enter the banking sector. However, its attempt to merge with lender Lakshmi Vilas Bank Ltd was blocked by the Reserve Bank of India (RBI) in October last year.
Earlier this month, Sameer Gehlaut, who founded Indiabulls Group with two others 20 years ago before splitting it in 2014, stepped down as the executive chairman of Indiabulls Housing Finance Ltd.
Gehlaut had set up Indiabulls Group in 2000 along with Saurabh Mittal and Rajeev Rattan. The partners separated in 2014.
Gehlaut retained the bulk of the business including housing finance, securities and real estate while Rattan and Mittal got sole control of power and infrastructure businesses. Rattan and Mittal also gave up the Indiabulls brand.