Investment Corporation of Dubai (ICD), the investment arm of Dubai government, signed a deal with shareholders in Spain's second largest property company Colonial to buy its investment properties, valued at more than nine billion euro, Propertyweek reported.

The acquisition will take place after Colonial is split in two: one holding the company's investment portfolio in Spain and France and the other one holding its land stock and developments.

ICD will take over the investments in Spain and France, while a new company would be set up to own the developments, which are valued at 2.1 billion euro, but have 962 million euro of debt.

The deal comes with a number of conditions, which include a clause that the core shareholders' main creditors must guarantee Colonial's shares and that an accord must be reached on refinancing of Colonial's nine billion euro worth of debt.

The agreement must be approved by Colonial's board, be cleared by competition authorities and will be cancelled if there are any 'adverse' changes within five months of the agreement.

The deal has been accepted by Colonial's two core shareholders, Realtor Nozar with 12.3 per cent and Luis Portillo with 39.65 per cent, as well as by Alicia Koplowitz Omega Capital with 8.91 per cent, Propertyweek said.

ICD declared its intention to acquire the Spanish Colonial company almost a month ago, when it offered about three billion euro for the Spanish group, which is the owner of retail developer Riofisa SA, which has two large-scale projects in Bulgaria - the 270 million euro-worth CIVIS centre near Sofia's central railway station and a big multifunctional complex in Plovdiv, estimated at 175 million euro.

Colonial also owns a 15 percent stake in Fomento de Construcciones y Contratas, Spain's third-largest construction company, which will build Danube Bridge 2, linking Vidin and Bulgaria, and the adjacent infrastructure. The two projects are estimated at 162 million euro.