Two way bet

23 March 2009 By Una Galani Follow @ugalani

The German carmaker gets E1.9bn at a tiny discount and avoids having to turn to the German government. The emirate is betting on longterm strategic benefits. After losing on a string of financial bets, Abu Dhabi, like China, now appears to be focused on finding strategic value.

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Abu Dhabi's majority stateowned investment vehicle Aabar has agreed to take a 9.1% stake in Daimler for E1.95bn, making it the German carmaker's largest shareholder.

Daimler will issue 96m new shares to Aabar at E20.27 each. Aabar will be issued new shares amounting to 10% of the current outstanding shares. There will be no rights issue or clawback for existing shareholders.

The holding of the Kuwait Investment Authority, which has held a stake in the carmaker since 1974, will be diluted from 7.6% to 6.9%. It will now be the company's second largest shareholder.

On March 23, Aabar completed its planned $1.8bn capital raising. The International Petroleum Investment Corporation, a sovereign fund of Abu Dhabi, has bought almost Dh7bn worth of convertible bonds under a deal announced last September.

Following the conversion, IPIC will control 76% of Aabar.

Context News

Abu Dhabi's majority stateowned investment vehicle Aabar has agreed to take a 9.1% stake in Daimler for E1.95bn, making it the German carmaker's largest shareholder.

The holding of the Kuwait Investment Authority, which has held a stake in the carmaker since 1974, will be diluted from 7.6% to 6.9%. It will now be the company's second largest shareholder.

Following the conversion, IPIC will control 76% of Aabar.

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