French REITs to merge in €1.7b deal

The boards of directors of the Société de la Tour Eiffel (ETS) and Affine RE (Affine) have approved the plan for a merger.

The merger would create a property listed on Euronext Paris, a SIIC status and whose assets would reach more than €1.7 billion ($1.97 billion).

The proposed merger would take the form of a merger-absorption of Affine by STE on the basis of an exchange ratio of 1 new ETF share for three Affine shares. The proposed parity will be submitted to the merger commissioners.

At the end of the operation, after the merger, STE would dispose of a portfolio of 163 assets for an appraisal value excluding rights at June 30, 2018.

Assets located in Greater Paris represent 75 percent of the portfolio, other assets being located in regions, more than 16 percent in large regional cities with good domestic and international services, and strong demographic and economic dynamics: Bordeaux, Nantes, Lille, Lyon, Marseille, Toulouse. The Greater Paris cluster would be strengthened by quality Paris-style buildings from Affine.

STE will continue Affine’s policy of refocusing on strategic assets. It will therefore evaluate the asset portfolio after the merger to establish its arbitrations.