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Mubadala forms $8b GE venture
Mubadala Development Company, Abu Dhabi government's investment arm,on Tuesday said it has entered into a partnership with US conglomerate General Electric (GE), that will lead to the establishment of a commercial finance business worth $8 billion. Mubadala will also buy a stake in GE.
- By Ahmed A. Elewa, Senior Reporter
- Published: 00:03 July 23, 2008
- H.E. Khaldoon Al Mubarak, CEO and Managing Director of Mubadala and Jeff Immelt, Chairman of the Board and CEO of GE sign multi-billion dollar business partnership
- Image Credit: Supplied Picture
Abu Dhabi: Mubadala Development Company, Abu Dhabi government's investment arm,on Tuesday said it has entered into a partnership with US conglomerate General Electric (GE), that will lead to the establishment of a commercial finance business worth $8 billion. Mubadala will also buy a stake in GE.
The new financial arm will be established within the next 12 months, and will be headquartered in Abu Dhabi, capitalising on GE's asset growing capabilities, and Mubadala's regional strength.
"Incorporating the new company in Abu Dhabi is intended to benefit from the robust growth in the UAE and the region, as well as the many privileges offered, especially in taxes," Khaldoon Al Mubarak, Mubadala's chief executive and managing director told Gulf News.
The two companies will each allocate $4 billion in equity for the venture over a three-year period.
"We will be targeting high return asset classes from infrastructure, to commercial lending and leasing, as we seek to achieve a value of $40 billion within 12 to 18 months," Jeff Immelt, GE's chairman and chief executive officer told reporters at a teleconference yesterday.
Geographically, assets in the Middle East and Africa will take priority given the robust economic growth in these regions.
Other ventures in the framework include the establishment of a clean energy technology centre located in Masdar City that will house up to 100 technologists developing new sustainable energy.
GE also intends to commit up to $50 million to Masdar's second Clean-Tech Fund, focused on multi-geography investments in the clean technology sector. In addition, Mubadala intends to invest up to $200 million to GE Industrial Investment Partners, a new partnership of select global investors that will focus on providing growth capital to companies in the healthcare, energy, and transportation industries.
GE and Abu Dhabi Aircraft Technologies (ADAT) will explore expansion of their maintenance, repair and overhaul (MRO) capabilities to support the large and growing number of GE aircraft engines in service.
Mubadala will also build its shareholding position in GE through the open market to become one of GE's top ten shareholders.
"It makes a lot of sense for us to invest in GE given the attractive valuation, and the excellent performance, and over the time we will be building our position," Al Mubarak said.
Sovereign investor
- Mubadala, fully owned by the Abu Dhabi Government, was established in October 2002 as a public joint stock company.
- Chaired by General Shaikh Mohammad Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, the firm employs 500 professionals.
- Its focus is on developing and managing an extensive and economically diverse portfolio of commercial initiatives.
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