Abu Dhabi increases share in Daimler investment firm

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Wednesday, 25 March 2009 09:36

A company owned by the government of Abu Dhabi has invested an additional $1.41 billion in Aabar Investment PJSC. This gives the emirate the major shareholding in the investment firm that is set to become Daimler AG’s biggest shareholder. The announcement came after Abu Dhabi-based Aabar — an investment vehicle set up by the Persian Gulf sheikdom — said it would pay nearly euro 2 billion ($2.72 billion) for a 9.1 percent stake in the German car maker.

Aabar is different from a large number of the oil-rich Persian Gulf's sovereign wealth funds in that some of its shares are publicly traded. This structure is set to continue, though the government will now have a demonstrable controlling interest in Aabar.

Abu Dhabi is the largest and most wealthy of the seven emirates comprising the UAE.

The announcement of the additional funding follows a similar cash injection worth about $408 million by IPIC during February. Once the latest transaction is completed, IPIC will own 71% of Aabar.

IPIC is chaired by Sheik Mansour Bin Zayed Al Nahyan, a prominent member of Abu Dhabi’s ruling family, which controls the United Arab Emirates presidency. The Daimler deal appears to be Aabar’s biggest overseas investment yet.

In December, Aabar agreed to buy American International Group’s Swiss-based wealth management company AIG Private Bank. Aabar will therefore become Daimler’s largest shareholder. The car maker’s second-largest owner is Kuwait’s primary sovereign wealth fund, which has a 6.9% stake.