Abu Dhabi may have more mergers

15 January 2017

State-controlled investment fund Mubadala’s chief executive says there is an appetite in the emirate for such deals

There’s an appetite for mergers in Abu Dhabi and the emirate is likely to have more deals as institutions there look for tie ups which could boost their business, according to Khaldoon Khalifa al-Mubarak, the group chief executive of state-controlled fund Mubadala.

“I expect to see mergers continue in a positive way in Abu Dhabi,” Mubarak told reporters, without elaborating which of the firms are looking to merge.

Mubadala Development Company, itself is in the process of merging with International Petroleum Investment Company (Ipic), an Abu Dhabi government-controlled energy investment fund. The government in June announced the merger of the two entities and according to Mubarak, the deal is at the final stages and would be completed within weeks.

The two companies, which have combined assets of about $130bn, with Ipic and Mubadala having also to $65bn each. The merger of Ipic and Mubadala will be a “merger of equals”, creating synergies to optimise additional value to the economy, UAE’s Energy Minister Suhail al-Mazrouei said in November.

Ipic is working on $14bn of hydrocarbons storage, refining and petrochemicals projects in the UAE and wider Middle East. Progress on the schemes has been slow in the past year. They include the Fujairah refinery, the Duqm refinery in Oman, and Emirates LNG, in joint venture with Mubadala.

Mubadala manages a global portfolio in aerospace, hydrocarbons, metals and mining, defence, information technology, healthcare, real estate, infrastructure, and utilities. Its subsidiaries include Aldar Properties, Strata, Dunia Finance, Dolphin Energy, Mubadala Petroleum, Emirates Global Aluminium, Tabreed, and Abu Dhabi Future Energy Company (Masdar).

Abu Dhabi’s First Gulf Bank and National Bank of Abu Dhabi are also completing a merger, which could a slightly longer time, he said.

Al-Mubarak added that Mubadala was in talks with Japan’s SoftBank to invest in a technology fund of up to $100bn that the Japanese firm is putting together with Saudi Arabia and others. News agency Reuters had earlier reported that Mubadala might invest between $10bn and $15bn, and that an agreement could be signed within weeks.

 

 

 

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.