Servicios Corporativos Javer S.A.P.I. de C.V., one of the largest privately owned housing development companies in Mexico, and Empresas ICA S.A.B. de C.V., the largest engineering, construction, procurement and infrastructure company in Mexico, have entered into a definitive agreement to combine their home building assets, creating the second largest home builder in the nation's state-owned Infonavit mortgage origination system.
As part of the agreement, Javer will acquire the assets and operating liabilities related to 20 affordable housing development projects being developed by ICA through its ViveICA subsidiary in exchange for newly issued shares of stock representing a 23% ownership interest in Javer, plus the refinancing of 600 million pesos of associated project debt. The 20 housing developments could contribute up to 7,000 units annually to Javer's operations and include land reserves for more than 40,000 units, while the addition of ViveICA's developments and land reserves will add six new cities in five Mexican states to Javer's market presence.
ICA will become Javer's third largest shareholder, with two board seats. Diego Quintana, ICA's vice president for strategic alliances, will become co-chairman of Javer's board of directors.
‘By combining our housing operations, Javer and ICA will have the critical mass to realize economies of scale and pursue expanded marketing initiatives, with a broader geographic presence," says Alonso Quintana, ICA's CEO.