DUBAI — The combined value of a spate of foreign acquisitions made by Gulf companies this year is poised to surpass all forecasts and may swell to over $60 billion if Qatar’s $21.3 billion takeover of UK supermarket giant J Sainsbury also succeeds in the wake of Dubai Aerospace Enterprises' latest $2 billion acquisition of 60 per cent share in Auckland International Airport on Monday.
Led by UAE and Qatar-based buyout firms, the global acquisition frenzy is expected to continue well into 2008 with Dubai International Capital LLC (DIC), the global buyout arm of Dubai Holding, short-listing five more Fortune 500 companies for possible investment and about 15 on a close watch list. DIC is also pressing ahead to make 10 investments of about $1 billion each. Over the past couple of months alone, DIC has made investments in European Aeronautic Defence & Space, the maker of Airbus aircraft, global banking giant HSBC Holdings and ICICI Bank of India. DIC also has unveiled a restructuring programme targeted at creating more than $25 billion of assets under management in two years.
Dubai-based Istithmar is also keeping pace with DIC with a string of possible new acquisition targets, including its bid for Barneys of the US.
According to analysts, Gulf-based companies have made foreign acquisitions worth more than $40 billion since the beginning of this year. Some of the headline grabbing investments include the $11.6 billion purchase of General Electric’s plastics business by Saudi Basic Industries (Sabic), and the $6.11 billion bid by a consortium led by Kuwait’s Mobile Telecommunications Company (MTC) for Saudi Arabia’s third mobile licence.
Saudi investor Maan Al Sanea has acquired around $6.81 billion worth of shares in HSBC Holdings, and Saudi Telecom Company (STC), the largest Arab telecoms operator, has said it will buy 25 per cent of Malaysia’s Maxis for $3 billion.
Qatar, which invested $1.5 billion in Sainsbury this year through its investment arm Delta Two, and currently controls 25 per cent of the company, is almost close to clinching a deal to acquire the supermarket giant at about $24.5 billion, including debt.
Other significant foreign acquisitions by Gulf companies include Saudi Arabia-based National Industrialisation Company’s agreement to buy the titanium dioxide pigment business of Lyondell Chemical Company for $1.2 billion, the $965.3 million purchase of British luxury carmaker Aston Martin by a consortium headed by Kuwait’s Investment Dar, Dubai's 1.35 billion euro acquisition of a 2.2 per cent stake in Deutsche Bank AG through DIFC Investments, an arm of the Dubai International Financial Centre.
Early this month, Saudi Arabia's National Commercial Bank, the Gulf's largest lender by assets, made its first foreign acquisition, in Turkey. The bank has bought a 60 per cent stake in Islamic lender Turkiye Finans for $1.08 billion. In June, Saudi Telecom Co bought 25 per cent of Malaysia's Maxis in a $3 billion deal to gain access to Indonesia and India, and complete southeast Asia's biggest buyout