Mubadala to expand GE stake

Mubadala Development Company said it expects to finalise bigger investment deals with General Electric following Tuesday's agreement for an $8 billion (Dh29.3bn) joint venture.

The agreement signed with GE in New York covered a wide range of investment fields, including aviation, energy, financing of commercial transactions, development of training and research facilities, and other activities.

Mubadala's Chief Executive and Managing Director Khaldoon Al Mubarak said "It also includes investment by Mubadala in GE's parent company… in a nutshell, it is a comprehensive and diverse agreement."

"There is no doubt this agreement was just the first step in our investment strategy in that company… through this strategic relationship, which has become very strong and clear between Abu Dhabi and GE, there will be bigger and better opportunities for us… this will certainly expand and develop this already strong relation," he told Abu Dhabi state television.

Mubarak gave no further details but Mubadala said after signing Tuesday's agreement it aimed to become one of the largest stake holders in GE, the fourth largest company in the US in terms of market capitalisation.

The agreement, which was signed by Mubarak and GE Chief Executive Officer Jeffrey Immelt, will create a $8bn financing venture in Abu Dhabi and turn the Mubadala into one of the largest shareholders of the US company.

A joint statement said the two companies would create a globally focused business finance unit headquartered in Abu Dhabi within the next year, with each company investing $4bn over a three-year period into the venture.

Mubadala also said it intended to begin buying shares in GE with the intention of becoming one of its 10 largest institutional shareholders in the company.

In comments at a recent finance conference in Abu Dhabi, a senior Mubadala official said the company would push ahead with its investment drive, including financing services, but he did not rule out the US despite the crippling sub-prime crisis that jolted global markets and inflicted heavy losses on many American companies.

"As for our plans, we are looking for the best opportunities whether here in the UAE or in other countries. At present we are considering investing in financial services but we are also looking at other sectors," said Greg Fewer, an adviser at Mubadala's Project and Corporate Finance section.

"I cannot say which markets we will target as we try to regularly follow up and identify opportunities. As for the United States, it is still an attractive market."