Zurich: Abu Dhabi-based investment firm Mubadala Development led a $1.3 billion takeover of Swiss aircraft maintenance firm SR Technics yesterday, adding to a portfolio that includes stakes in sportscar maker Ferrari and Italian planemaker Piaggio Aero.
Mubadala's partners are Dubai investment firm Istithmar and Dubai Aero-space Enterprise (DAE), which has said it plans to invest $15 billion over the next five years to create a multi-faceted aerospace firm in Dubai.
"Our consortium and the management of the company see great opportunities to build the brand in the Middle East and the Asia/Pacific regions," said Bob Johnson, the former chairman of US firm Honeywell Aerospace who became chief executive of DAE in July.
Airlines such as Emirates have made the Gulf one of the airline industry''s fastest-growing regions and high fuel prices are forcing carriers globally to lower costs, prompting more outsourcing of businesses such as maintenance.
The Gulf investors are purchasing the stake from private equity investors 3i Group and Star Capital, who bought the company with management in 2002 for 425 million euros.
The new buyers said SR Technics would remain a separate company under current CEO Hans Lerch.
The former maintenance arm of defunct airline Swissair, SR has 5,000 employees, with key facilities in Switzerland and Ireland.
Clients include Swiss International Air Lines and Asian airlines such as Cathay Pacific and Thai Airways International.
SR signed a $1 billion, 10-year maintenance deal with European budget carrier easyJet in August 2005.
This July, planemaker Boeing Co tapped SR Technics to join its GoldCare network of maintenance providers for the 787 model due in 2008.
Of the just over 90 per cent stake to be acquired, Mubadala will hold 40 per cent, with DAE and Istithmar each taking 30 per cent. The balance of shares will be held by the company's management.
The deal is subject to regulatory approval and is expected to be completed in two months.
Istithmar is affiliated with Dubai Ports World, a firm which ran into political opposition in the US earlier this year.
An investment holding company indirectly owned by the government of Dubai, Istithmar is headed by Sultan Ahmad Bin Sulayem, who also chairs Dubai Ports World.
After Dubai Ports World bought ports operator P&O for $6.8 billion earlier this year, some US lawmakers expressed concern about six ports that were involved in the deal.