Volkswagen (VW) of Germany has reached an agreement in principle with the Abu Dhabi government to set up a joint venture in the emirate with state-owned Mubadala Development Company and the newly established General Holding Company, the official Emirates News Agency (WAM) reported on 6 September (MEED 4:6:04).
According to Sheikh Hamed bin Zayed al-Nahyan, chairman of the Abu Dhabi Economy Department, the new holding company will launch five manufacturing and assembly projects worth a total of AED 2,000 million ($545 million) in early 2005, to be followed by a further AED 5,000 ($1,362 million) of unspecified investments at a later date. 'The company will be launched when all the necessary procedures are completed,' Sheikh Hamed said. The announcement comes after VW, Mubadala and Saudi Arabia's Olayan Groupreached an initial agreement in June to buy car fleet management firm Leaseplan Corporationof the Netherlands from ABN Amro, with the two Gulf firms each taking a 25 per cent stake in the company. Abu Dhabi in May signed a memorandum of understanding (MoU) to acquire a 10 per cent stake in the German car maker - VW later said it planned to use proceeds from the stakeholding to finance its Leaseplan acquisition. However, German newspapers say it is no longer clear whether either of the deals will go ahead.