Singapore investors woke up today to some pretty blockbuster business news – Capitaland’s proposed acquisition of Ascendas-Singbridge (ASB) from Temasek Holdings to create Asia’s largest diversified real estate group.

While I am not a shareholder of Capitaland, curiosity got me reading the announcement circular and snooping around Ascendas-Singbridge’s site. Here’s some of my initial thoughts.

Announcement details can be found here.

Acquisition Rationale

Simply put, the deal is highly synergistic and beneficial to the overall business. Capitaland and ASB operate in similar businesses and geographies, with the only difference being the type of real estate they develop and manage.

Capitaland has a more residential, office and retail mall focus, while ASB has a more business space / industrial park and hospitality focus. The combined entity will cover almost the entire spectrum of conventional property listed on the SGX.

This in my opinion, is the best part of the deal.