Latham & Watkins is advising ARA Asset Management Limited (ARA), the largest real assets manager in Asia Pacific, in relation to a proposed business combination of the ARA Group with ESR Cayman Limited (ESR). ESR is a leading Asia Pacific focused integrated new economy real estate platform comprising logistics and data centers (New Economy), headquartered in Hong Kong and listed on the Hong Kong Exchanges and Clearing Limited. Together with ARA’s platform of over US$95 billion in gross assets under management by the Group and its associates, the combined entity will become the largest real estate and real assets manager in Asia Pacific with gross AUM of US$129 billion, anchored by APAC’s leading New Economy real estate platform in logistics and data centers, and the third largest listed real estate asset manager globally. Signing of the acquisition agreement and announcement of the transaction took place on 4 August 2021.
The transaction will be implemented through a sale and purchase and potentially a Bermudan merger, for a total consideration in excess of US$5 billion comprising (subject to adjustments) US$519 million in cash, 1,234,438,841 ESR shares at a per share price of HK$27.00 and US$387 million of vendor loan notes convertible into ESR shares. In addition, at completion, Sumitomo Mitsui Banking Corporation will subscribe for an additional 76,689,349 shares in ESR for an aggregate subscription price of US$250 million. Completion of the Proposed Transaction is conditional upon the satisfaction of certain regulatory and other conditions, and is expected to take place in the fourth quarter of 2021 or first quarter of 2022.
Latham & Watkins has worked with ARA since advising the Warburg Pincus led consortium that took it private from the Singapore Stock Exchange in 2016 and also advised on ARA’s acquisition of Australian real assets manager Logos and its take private with SMFL of Japanese listed Kenedix.
The core M&A deal team was led by Hong Kong partners Amy Beckingham, Richard Watkins and Terris Tang, with Hong Kong associates Bing Xi Sia, Frances Yu and Joanne Lao, and Singapore associate Gwenlynne Lee. The core team was supported by a large global team of tax, regulatory, finance, anti-trust and foreign investment lawyers. The Latham & Watkins team worked closely with Mark Hwang (General Counsel of ARA), Natalie Allen (General Counsel of Logos) and Yilong Du and Chelsea Xuan (Asia general counsel and legal counsel at Warburg Pincus).