Kennedy Wilson Europe (KWE), the London-listed real estate investment firm, is to merge with its parent company Kennedy Wilson to create a £3.1 billion ($4 billion; €3.6 billion) real estate giant.
The deal will create a global real estate powerhouse with a market capitalization of $4 billion and an enterprise value of £5.4 billion ($8.2 billion; €7.5 billion).
A statement released by the Kennedy Wilson board said it believed the merger would create a leading global real estate investment and asset management company with enhanced scale, diversification, liquidity and access to capital.
William J McMorrow, chairman and chief executive officer of KW, said the merger represented one of Kennedy Wilson’s “most significant milestones” in its 40-year history.
“The combination will create a leading global real estate investment and asset management platform with enhanced diversification supported by the continuity of leadership with a strong, proven track record,” he said.
McMorrow also said the new business would benefit from greater scale and improved liquidity which would enhance the firm’s ability to generate attractive risk-adjusted returns for its shareholders.
“The merger significantly improves our recurring cash flow profile, and, as such, we are pleased to announce our intention to increase our first quarterly dividend by approximately 12 percent upon completing the transaction, which demonstrates our confidence in the combination and our long-term prospects,” McMorrow added.
Shares in Kennedy Wilson Europe lept 13 percent on the London Stock Exchange following the announcement of the news.