Emaar Merger Signals Dubai Inc. Consolidation,M&A Wave

The merger of Dubai's Emaar Properties PJSC (EMAAR.DFM) and three state-controlled property firms could prompt a wave of consolidation in the struggling emirate, analysts say.

"We believe M&A will pickup over the next 18 months in addition to questions around the standalone survivability of several developers," said UBS AG analyst Saud Masud. "We would not rule out mergers within the three key holding entities as well as cross-holding consolidation as Dubai Inc. seeks to strengthen its balance sheet," he said.

The planned merger between Emaar and Dubai Properties LLC, Sama Dubai LLC and Tatweer LLC is Dubai's boldest step yet to stem the collapse of the emirate's real estate market where prices have tumbled up to 40%.