Abu Dhabi investment firms Gulf Capital and Waha Capital ‘holding merger talks’

Abu Dhabi’s state fund Mubadala has a minority stake in Waha Capital and Abu Dhabi Investment Council (ADIC), a unit of Mubadala, is a shareholder in Gulf Capital. (Reuters)
Updated 08 May 2019
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Abu Dhabi investment firms Gulf Capital and Waha Capital ‘holding merger talks’

  • Private equity firm Gulf Capital manages over $4 billion in assets
  • Waha Capital’s total assets stood at $3.18 billion at the end of last year

DUBAI: Abu Dhabi investment firms Gulf Capital and Waha Capital have held exploratory discussions regarding a merger, according to three sources familiar with the matter.
The talks have taken place over several months and may or may not lead to a deal, the sources said.
Private equity firm Gulf Capital manages over $4 billion in assets. Waha Capital’s total assets stood at $3.18 billion at the end of last year. It also managed funds of $700 million.
Waha Capital’s portfolio of investments includes stakes in aviation leasing firm AerCap Holdings, a major Middle East and North African oil and gas services provider, and industrial real estate.
Abu Dhabi’s state fund Mubadala has a minority stake in Waha Capital and Abu Dhabi Investment Council (ADIC), a unit of Mubadala, is a shareholder in Gulf Capital.
Lower oil prices and government spending have spurred mergers and acquisitions in Abu Dhabi.
Waha Capital and Mubadala Investment Company declined to comment. Gulf Capital did not respond to an email seeking information.
Shareholders of Gulf Capital were pushing for a possible merger with Waha, said the sources, declining to be named due to commercial sensitivities.
Gulf Capital has been under pressure from ADIC and from Abu Dhabi Commercial Bank (ADCB), which also has a stake in Gulf Capital and a board seat, to seal deals, the sources said. ADCB declined to comment.
There are some other shareholders who also want a merger, they said. One of the sources said there could be some clarity about the merger plans by June.
However, the prospects for a deal are unclear following the appointment in March of Waleed Ahmed Al Mokarrab Al-Muhairi as chairman of Waha.
Al-Muhairi, who is also deputy group chief executive at Mubadala, is drawing up a strategy for Waha, one of the sources said.
It is unclear whether a merger might be part of that strategy, which should be presented to the board shortly, the source said.
Transactions in Abu Dhabi have picked up since two lenders combined to create First Abu Dhabi Bank in 2017. ADCB merged with two other lenders last week to create a bank with 423 billion dirhams ($115 billion) in assets, the third biggest in the UAE.
The talks also come amid some wariness among investors toward the private equity industry in the Middle East since the collapse of Dubai-based Abraaj Group last year.
Waha Capital abandoned plans to raise a $300 million private equity fund and is pushing ahead with a new strategy for its private equity business, it was reported in June.


RBS says Saudi bank merger boosts its core capital

Updated 16 June 2019
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RBS says Saudi bank merger boosts its core capital

  • RBS had a 15.3% interest in Alawwal bank
  • The changes would boost the banks CET1 core capital ratio by 60 basis points

Royal Bank of Scotland (RBS) said on Sunday the completion of a merger between Alawwal bank and Saudi British Bank would lead to RBS shedding $5.9 billion of risk weighted assets and boost its core capital.
RBS, through Dutch subsidiary NatWest Markets N.V., was part of a consortium including NLFI and Banco Santander S.A. that held an aggregate 40% equity stake in Alawwal bank, the British bank said in a statement. RBS also had an interest equivalent to a 15.3% stake in Alawwal bank.
RBS said that as a result of the merger completion, it would recognise an income gain on disposal of the Alawwal bank stake for shares received in Saudi British Bank of almost $503 million and a reduction in risk weighted assets of nearly $5 billion.
RBS also said the deal would extinguish legacy liabilities of almost $377.
The changes would increase the bank's CET1 core capital ratio by 60 basis points, it said.
The merger will also help RBS to focus on its target markets, RBS chief executive Ross McEwan said in a statement.
RBS, which was rescued in 2008 with a nearly $57 billion capital injection by the British government, has been shrinking its overseas operations since the financial crisis to focus on its UK lending operations.