September 21, 2020

BBVA says that talks with Merlin to sell the 'Operation Chamartín' do not continue



BBVA does not continue, at this time, with "the preliminary talks" with Merlin Properties, interested in the North Castellana District project, known as 'Operation Chamartín'. This was communicated this Sunday in a relevant event referred to the National Securities Market Commission (CNMV) in which it has also ensured that its interest is to move forward in the project approval process and guarantee its success.

The BBVA communication has been produced, at the express request of the CNMV, following the latest information on the possible sale to Merlin of the 'Operation Chamartín'. In this regard, the entity notes that among the "various approaches" that have been produced by third parties interested in the project, the company Merlin Properties Socimi "has shown interest in the project, which has resulted in preliminary discussions that , at this time, they don't continue. "

He also adds that "due to the importance and uniqueness of the project, and after the recent approval by the City Council of Madrid, it is logical that financial and industrial investors show interest in it." In this sense, the entity assures that "as a majority shareholder of the Castellana Norte District, BBVA's priority today is to advance the project approval process and guarantee its success."

Since last Thursday it was learned that BBVA and Merlin Properties held talks about the 75% participation of the financial entity in the 'Operation Chamartín', one of the largest urban development projects in Europe, which still requires the approval of the Community of Madrid.

The operation would mean for BBVA to separate directly from the project and continue to cut its exposure to the real estate sector, although at the same time it would maintain a participation, although indirect, in it.

Also, the entity would become Merlin's partner again. The bank has already entered the capital of this socimi as a result of the merger in 2016 of this firm with Metrovacesa, also through an exchange of shares, although BBVA, unlike Santander, subsequently sold its shareholding in the socimi.

In addition, it would strengthen the relationships that the bank and the socimi directed by Ismael Clemente have maintained since the constitution of this firm, when in 2014 it bought a lot of 880 BBVA branches to occupy them for rent.

Merlin, by virtue of the eventual transaction, would be reinforced as the largest listed company in the country, boosting its branch of offices, since it already has buildings of this type, in addition to shopping centers and logistics centers valued at 12,375 million.

The 'Operation Chamartín'

BBVA has recently achieved the agreement of all the parties involved after more than twenty years of development and negotiation between the promoters and the three administrations that participate in the project, mainly laying the grounds, the Madrid City Council, the Community of Madrid and the Ministry de Fomento through Renfe and Adif.

The project is expected to receive a definitive 'green light' before the end of the year with the ratification by the Government of the Community of Madrid of the unanimous approval of the plenary session of the City Council last July.

The operation is promoted by Distrito Castellana Norte, a company in which BBVA has 75% that it negotiates to sell and the construction group San José, the remaining 25%.

The so-called 'Madrid Nuevo Norte' is associated with an investment of about 6,000 million euros and will involve acting on three million square meters of land, along an elongated strip of 5.6 kilometers in length that crosses the North of Madrid, from the vicinity of Plaza de Castilla to the M-40.

The forecast is that the urbanization works start at the end of 2020. The first phase of the complex is planned for 2028, although all the development includes a 24-year execution schedule.

. (tagsToTranslate) BBVA (t) conversations (t) Merlin (t) Operation (t) Chamartin



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