Tuesday, August 05, 2008

Mubadala to name US acquisitions

Original Article

Mubadala, Abu Dhabi’s increasingly active state investment vehicle, is expecting to announce new deals in the next four to six weeks as it looks to take advantage of the continuing financial turmoil in global markets, including opportunities in the depressed US real estate market.

Waleed Ahmed Al-Morkarrab Al-Muhairi, Mubadala’s chief operating officer, told the Financial Times the company was looking at heavy industrial type deals, as well as real estate.

“I think this is a very defining moment right now. Debt markets are a little thin, capital markets are very volatile and so there is opportunity there, and we are spending a lot of time making sure we deploy wisely and that we build the right businesses and partner with the right businesses,” Mr Muhairi said.

“We have so many deals on the screen right now that it is very difficult to say from a sequencing perspective what we are going to hit, but we are looking quite heavily at the industrial space, so heavy industrial type of deals [and] real estate, especially in the United States.”

He declined to provide further details, but said any new deals would be done through a “very particular lens” that tied in with Mubadala’s mandate of helping to diversify oil-rich Abu Dhabi’s economy.

In July, the company illustrated its ambitions with the announcement of an $8bn joint venture with General Electric to set up a commercial finance business in Abu Dhabi, as well as its target to become a top 10 institutional shareholder in the US group. It has also recently agreed ventures with EADS, the parent of Airbus, and Rolls-Royce as it seeks to develop the emirate into a hub for the aerospace ­industry.

Mubadala was established in late 2002 with the mandate of developing new businesses in Abu Dhabi, the capital of the United Arab Emirates.

It has become increasingly active in the past couple of years and its assets are valued at about $10bn. Mubadala’s portfolio stretches across a range of sectors, from healthcare to education and energy.

Last October, Mubadala established a joint venture with the Chicago-based developer The John Buck Company in Abu Dhabi, which is enjoying an un­precedented construction boom.

Other high-profile deals include the acquisition of a 5 per cent stake in Ferrari in 2005 and a 7.5 per cent holding in Carlyle Group last year.

“We don’t do deals just because they are high-profile, we do deals because they make sense financially and because they help us in our diversification aim,” said Mr Muhairi. “I wouldn’t discount the fact that you will see what I think the rest of the world will view as high-profile deals, but we do them because we look at a very particular lens.”

Abu Dhabi is home to about 95 per cent of the United Arab Emirates’ oil reserves and has a number of government investment vehicles including the region’s largest sovereign wealth fund, the Abu Dhabi Investment Authority.


Mubadala’s first high-profile deal was the acquisition of a 5 per cent stake in Ferrari in 2005, and Abu Dhabi is now building the world’s first Ferrari theme park and will host a Formula One grand prix late next year.

The company’s portfolio includes some 58 entities across a diverse range of sectors, in which it either has investments or wholly owns, according to its website.

Last year, its deals included purchasing a 7.5 per cent stake in Carlyle Group and 8.1 per cent in Advanced Micro Devices – a US-based firm that provides microprocessor solutions for computers – for $622m. In July, Mubadala announced plans to set up a facility to manufacture high-tech aerospace parts for EADS, the parent of Airbus, as well as a joint venture with Rolls Royce to provide engine maintenance services.

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