DUBAI — Two giant real estate companies have agreed to a merger that will change the face of development in the Arabian Gulf. Emaar announced on its website that it is planning to merge with three units of Dubai Holding to create an entity with combined assets worth US$53 billion.

For years, real estate development drove economic growth in the Gulf, which became famous for the construction of man-made islands and its record-breaking pace in erecting numerous massive skyscrapers. The global financial crisis and sharp drop in oil prices over the past year severely reined in that dynamic and scaled back the region's prosperity.

Analysts hope that the merger between two real estate giants will strengthen the position of Gulf companies in the face of current economic challenges and give developers the opportunity to adjust to currently prevailing circumstances in Dubai real estate.

Emaar Properties, in which the ruler of Dubai retains a 31 percent share, is the largest Arab development company in the world in terms of work volume. It attained international attention with the construction of the world’s tallest tower. The company will merge with Dubai Properties, Sama Dubai and Tatweer Entertainment Projects, three units of another real estate giant, Dubai Holdings, a process that will take about four months to complete and will absorb $4 billion of debt obligations.

A statement on Emaar's website announced that, "The proposed merger reflects our resolute dedication to transform Dubai into a global city, since construction and development is a key engine of growth."

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