SHARJAH, 1 February 2005 — Dubai Holding, through its investment arm Dubai International Capital, has bought a $1 billion stake in automaker DaimlerChrysler in a deal that boosts Dubai Holding’s role as a major international investor. Dubai Holding Chief Executive Officer Mohammed Al Gergawi announced the purchase. “This is a perfect time to acquire shares in DaimlerChrysler as the company begins to bear the fruits of its merger with Chrysler,” Gergawi said.
“DaimlerChrysler, which has been formed as the result of combining the German automaker Daimler and the American Chrysler, is now ready to be the leader in the automobile manufacturing industry,” he said.
DaimlerChrysler spokesman Thomas Froehlich welcomed the investment, adding that the purchase was recognition of DaimlerChrysler’s potential.
He said the move makes Dubai the third largest shareholder in the German-US company, after Deutsche Bank and the government of Kuwait.
According to DaimlerChrysler’s website, Deutsche Bank has a 10.4 percent stake in the company, while Kuwait has 7.2 percent.
Froehlich said Dubai Holding’s stake is well below five percent.
DaimlerChrysler’s shares closed on Friday at $45.02 on the New York Stock Exchange. Based on that price, a $1 billion investment would buy Dubai Holding about 22 million shares of the company, or about 2.2 percent of the 1.01 billion shares outstanding as of the end of September. “With the acquisition of such a significant stake in one of the most respected firms globally, Dubai Holding — through Dubai International Capital — has positioned itself as a significant international investor,” said Sameer Al Ansari, chief executive officer of Dubai International Capital. “We have proven our ability to negotiate and execute complex financial deals,” he said.
A DaimlerChrysler spokesman said: “We welcome Dubai as a long-term investor, which shows it believes in DaimlerChrysler’s potential.” Industry sources said that neither Deutsche Bank nor Kuwait — DaimlerChrysler’s biggest and second-largest shareholders — had reduced their stakes.
Dubai Holding was set up last October to run a host of “mega projects” designed to turn Dubai into a business and leisure hub.
Established on the instructions of Dubai Crown Prince and UAE Defense Minister Sheikh Mohammed Bin Rashid Al Maktoum, the company was to help start ventures in the fields of media, health care, tourism, property, energy and industry.
Its units include real estate company Dubai Properties as well as Dubai Internet City, Dubai Media City, and Dubai Health Care City.
DaimlerChrysler is active in about 200 countries. As of the end of 2003, it had a work force of over 360,000 and more than 100 production locations in 17 countries. Its passenger vehicle brands include the luxury Maybach, Mercedes-Benz, Chrysler, Jeep, Dodge and Smart. The giant automaker has sold almost four million passenger vehicles.
DaimlerChrysler is also the worldwide leader in commercial vehicles with Mercedes-Benz trucks, Freightliner, Western Star, Fuso, and Mercedes-Benz buses. The group sold more than 500,000 commercial vehicles in 2003.