In the past Aabar’s primary investments lay in the automotive and infrastructure industries, both at home and abroad; Aabar is the largest shareholder in Daimler AG, it has interests in Tesla Motors (the makers of electric vehicles) and it owns approximately a third of Virgin Group’s Virgin Galactic (a company aimed at making space travel available to the masses). The portfolio is rounded out by holdings in an Italian infrastructure firm that holds contracts to service Italy’s motorways and a strong real estate arm in Abu Dhabi. Since early 2009, Aabar has begun to expand into financial services.
In a splendidly understated manner, Mohamed Badawy Al-Husseiny, Aabar’s chief executive told the press upon announcing the UniCredit deal, “We have always had a strategy to invest in financial services,” he went on, “With the decline in the Euro, wherever we see good opportunities that fit our profile, we will pursue this.” Expect more of the same in the future.
The latest investment is the most striking example of Aabar’s move into financial services, prior to the UniCredit deal, Aabar purchased Falcon Private Bank, formally AIG, in April and acquired 328 million USD of depository shares in Banco Santander Brasil pursuant to the initial offering, in October of this year. UniCredit is a major international financial institution, one of the biggest lenders in Central and Eastern Europe with services and activities in over 20 European countries, and just under 10,000 branches in total. Within Eastern Europe, UniCredit dominates the regional market, with approximately 4,000 branches, giving it one of the highest market shares in the region.
The UniCredit deal makes Aabar’s previous moves into global finance appear to be small scale in comparison. This bold move into European finance, at a time when the world is far from recovered from the economic travails following the sub-prime debacle, is perhaps the most audacious move of 2010 when it comes to Middle Eastern financial institutions. Aabar and UniCredit will bear watching.
WHO Aabar Investments
WHAT A 4.99 per cent acquisition of UniCredit
DETAILS 2.48 million USD deal was announced in July 2010
WHY Through purchasing almost five per cent of one Europe’s largest banks, Aabar has consolidated its moves into the international finance arena in a manner few expected.
www.aabar.com
