Qatar Holding acquires 9.1% stake in German industrial giant Hochtief

Dubai: Qatar Holding on Monday announced the acquisition of a 9.1 per cent shareholding in Hochtief through an increase of share capital with exclusion of subscription rights.

"Qatar Holding intends to work with all Hochtief's stakeholders to help develop Hochtief's business, preserve its core values and maximise its potential over the long-term," the company said in a statement.

Hochtief Aktiengesellschaft is Germany's largest construction company.

It is based in Essen but operates globally, ranking as the top general builder in the United States through its Turner Corporation subsidiary, and in Australia through the Leighton Group.

It currently employs more than 48,000 employees across five corporate divisions.

Deep relationship

Shaikh Hamad Bin Jasem Bin Jaber Al Thani, Qatari Prime Minister and Chairman of Qatar Holding, said: "We are happy to be making this investment today in Hochtief, which will further enhance the deep relationship between Germany and Qatar and will facilitate the transfer of advanced technology and know-how to Qatar."

The move comes a few days after Qatar stunned the world by winning the right to host World Cup football in 2022, which, analysts say, will help trigger greater economic activities on the Arabian peninsula.

Qatar earlier bought a stake in Harrods.

"With 2010 GDP estimated to be $124 billion (Dh455.4 billion), Qatar is a very rich but small country..." Elena Panayiotou of Moody's credit rating agency said yesterday.

"Looking ahead, we expect the government's increased investments in the non-oil and gas sector of the economy [which currently accounts for around 50 per cent of GDP] to boost [the] private sector..."

Dr Hussain Ali Al Abdullah, vice-chairman of Qatar Holding, added: "As a leading global infrastructure business, Hochtief enhances our international portfolio of assets through its exposure to world markets, including the Middle East, the important emerging markets of the Far East as well as Europe and the United States."

Ahmad Mohammad Al Sayed, managing director and chief executive officer of Qatar Holding, said: "Hochtief and Qatar Holding have an existing strong partnership and this transaction cements our relationship with one of the key trading partners for the development of the infrastructure of Qatar ahead of the World Cup in 2022."

Moody's estimates that accelerated government spending of $57 billion over the next decade for infrastructure development projects will create new lending activity for all banks in a system where total banking assets amounted $129.4 billion at year-end 2009.

Al Sayed said: "We are very pleased that Hochtief will locate its Middle East headquarters in Doha and has agreed to support Qatar by transferring the most recent international know-how to Qatar."

Evercore Partners and HSBC acted as financial advisers to Qatar Holding.

Brief history: Brothers in business

Hochtief's history dates back to the 1870s and includes engineering feats such as the relocation of the Abu Simbel rock temples in Egypt (saving them from the rise of the River Nile caused by the Aswan High Dam), and infrastructure projects like the new Athens International Airport and Germany's first nuclear power plant.

Hochtief was founded by two brothers: Balthasar (1848-1896) and Philipp Helfmann (1843-1899) in 1883. In 1872 Philipp Helfmann moved away from Kelsterbach, where he and his brother had been born, to the Bornheim district of Frankfurt to start in business as a lumber merchant.

Soon after that he become a building contractor. His brother Balthasar followed him in 1873. In 1874 the Bornheim address book first recorded the firm as "Helfmann Brothers".