May 31 (Reuters) – SM Prime Holdings said it will nearly double in size to become the Philippines’ biggest property firm by absorbing all the real estate-related interests of the SM group through mergers with other units.

The move is aimed at helping SM Prime better undertake large-scale development projects and gain access to lower borrowing costs. SM Prime is a unit of SM Investments Corp which is in turn controlled by the country’s richest man Henry Sy.

SM Prime will merge with unlisted SM Land Inc, nearly doubling SM Prime’s market value to $14 billion, SM Prime’s Chief Financial Officer Jeffrey Lim told reporters. That would exceed current industry leader Ayala Land Inc’s market cap of almost $11 billion.

Prior to that merger, SM Land will first acquire all shares of property developer SM Development Corp and leisure firm Highlands Prime Inc, both of which will be delisted from the stock exchange.

The reorganisation, which will also include SM Prime acquiring some property assets of SM Investments, will result in SM Prime doubling its asset base to 284 billion pesos ($6.7 billion).

“The gain of critical mass should generate economies of scale across various functions including land sourcing, master-planning and coordinated marketing efforts,” SM Prime President Hans Sy said in a statement. Hans Sy is the son of Henry Sy.

Trade in SM Prime, SM Development Corp and SM Investments Corp was halted on Friday ahead of the announcement.

The moves will be subject to a SM Prime stockholder vote on July 10.

BDO Capital and Investment Corporation, JP Morgan (S.E.A.) Limited and Macquarie Capital (Singapore) Pte Limited were financial advisors on the reorganization. BDO Securities Corporation will be the offer agent for SM Land’s tender offers.

($1 = 42.3200 Philippine pesos) (Reporting by Rosemarie Francisco; Editing by Edwina Gibbs)