Amlak and Tamweel Hold `Exploratory' Talks on Combination

By Ambereen Choudhury

Oct. 4 (Bloomberg) -- Amlak Finance PJSC and Tamweel PJSC, the largest mortgage lenders in the United Arab Emirates, started ``exploratory discussions'' about a possible merger.

The combination would have a balance sheet of more than 27 billion dirhams ($7.35 billion), Amlak Chairman Nasser Bin Hassan Al-Shaikh said in an e-mailed statement today. Major shareholders, including Emaar Properties, Dubai Islamic Bank and Dubai World are ``fully supportive,'' the companies said.

``The markets are expected to experience continued strong growth in the years to come,'' Al-Shaikh said in the statement. ``A powerful market participant will be required to manage this growth both at home and internationally.''

The U.A.E.'s mortgage market will expand 10-fold by 2012 to about $44 billion, Egyptian investment bank EFG-Hermes Holding SAE said last year. Amlak has a market capitalization of 4.95 billion dirhams and Tamweel is valued at 3.8 billion dirhams.

The transaction is subject to regulatory approval and is expected to be completed in early 2009. The Dubai-based companies will hold extraordinary general meetings to seek shareholder approval.

Goldman Sachs Group Inc. is advising on the transaction.

To contact the reporters on this story: Ambereen Choudhury in London at achoudhury@bloomberg.net.