(Reuters) -Office rental company IWG Plc said on Tuesday it would merge its digital and tech assets with flexible workspace provider The Instant Group, as commercial property firms look to cater to evolving trends including hybrid working.
IWG’s decision to separate its digital and tech assets comes at a time when office landlords are limping back to recovery as corporate clients increasingly reassess their options, including a shift to permanent hybrid work model, downsized spaces and shorter leases, in the wake of the pandemic.
IWG will invest about 270 million pounds ($353.65 million) to buy the stakes of selling shareholders, while The Instant Group’s management will invest about 50 million pounds into the combined business, which is expected to be spun out by 2023-end through a listing either in the United States or UK.
The London-listed owner of the Spaces and Regus brands, IWG said it expected the merger would provide “significantly higher” earnings and the deal to be earnings-accretive in the first full year of ownership.
The Switzerland-headquartered firm, which operates in more than 3,300 locations across 120 countries, said loss before tax from continuing operations came in at 259.4 million pounds for the year ended Dec. 31, compared with a loss of 613.3 million pounds a year earlier.
($1 = 0.7635 pounds)
(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Subhranshu Sahu)
