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.


Samsung shares rise as Huawei struggles

Updated 5 min 7 sec ago
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Samsung shares rise as Huawei struggles

  • Huawei has been rocked with promblems in the past weeks, including major revelations from tech giants
  • Samsung is the world’s biggest smartphone maker which has been facing increasing competition from its Chinese rival

SEOUL: Shares in Samsung Electronics climbed nearly three percent Tuesday on the back of its chief rival Huawei’s mounting problems, including a decision by Google to sever ties with the Chinese mobile phone maker.
It is the latest in the months-long saga between Huawei and the United States analysts warn could see Chinese semiconductor demand fall, threatening a nascent Asian recovery in the industry.
US Internet giant Google, whose Android mobile operating system powers most of the world’s smartphones, said this week it is cutting ties with Huawei to comply with an executive order issued by President Donald Trump.
The move could have dramatic implications for Huawei smartphone users, as the firm will no longer have access to Google’s proprietary services — which include the Gmail and Google Maps apps.
Investors bet Huawei’s loss could benefit Samsung, the world’s biggest smartphone maker which has been facing increasing competition from its Chinese rival, sending its shares up 2.7 percent at closing on Tuesday.
Analysts say the US ban will damage Huawei’s ability to sell phones outside China, offering Samsung a chance to consolidate its position at the top of the global market.
“If you are in Europe or China and couldn’t use Google map or any Android services with a Huawei smartphone, would you buy one?” MS Hwang, an analyst at Samsung Securities, told Bloomberg News, adding: “Wouldn’t you buy a Samsung smartphone instead?“
Samsung accounted for 23.1 percent of global smartphone sales in the first quarter of this year, according to industry tracker International Data Corporation, while Huawei had 19.0 percent.
But Huawei’s troubles may be a double-edged sword for Samsung — also the world’s biggest chipmaker — if it leads to a plunge in demand for semiconductors.
China dominates purchases from Asian chip makers and bought 51 percent of their shipments in 2017, Bloomberg reported citing a Citigroup analysis. Including Hong Kong, it accounted for 69 percent of South Korea’s chip production.
“In our view, China’s restocking efforts for electronic goods will likely weaken and be delayed if the tensions and the ban stay longer, which likely will hurt overall demand,” the report said.
Last week, Trump declared a “national emergency” empowering him to blacklist companies seen as “an unacceptable risk to the national security of the United States” — a move analysts said was clearly aimed at Huawei.
The US Commerce Department announced a ban on American companies selling or transferring US technology to Huawei, with a 90-day reprieve by allowing temporary licenses.