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21 February 2024

US-UAE links at their strongest yet

By VM Sathish


Commercial links between the UAE and the United States are at their strongest yet, with the presence of 750 American companies in the UAE, and Emirati companies investing more than $3.5 billion (Dh12.6bn) in US companies in 2006.

Transactions in 2007 included a $7.5bn (Dh27bn) stake in Citigroup by the Abu Dhabi Investment Authority (ADIA). Borse Dubai, the government-controlled exchange, has agreed to take a 19.9 per cent stake in the Nasdaq, and to buy Nasdaq’s 28 per cent stake in the London Stock Exchange. Mubadala Development Company took a 7.5 per cent stake in the Carlyle Group and an eight per cent stake in Advanced Micro Devices. Istithmar, a Dubai fund, also bought Barneys New York.

A US Government announcement, on the eve of President George W Bush’s UAE visit on Sunday, said about 28,000 American citizens live in the UAE, which is now connected to the US by four daily non-stop flights. The announcement also said that the volume of bilateral trade and investment was growing, with the private sectors of both countries forming joint ventures in the UAE and the US.

“UAE institutions have been consistent and responsible investors in US capital markets for more than 30 years. The UAE has generated most of its oil revenues from sales to Asia while re-investing a significant percentage of that revenue in US markets,” said the announcement.

Emirates airlines is the biggest customer for the Boeing 777, with 98 aircraft in service or on order. A 2005 order for 42 aircraft is valued at $9.7bn and a 2006 order for 10 Boeing 747-8 freighters includes an option for 10 more. Etihad Airways, too, has purchased five Boeing 777-300ER aircraft, valued at $1bn.

UAE-US joint projects include MGM Mirage, the multibillion-dollar joint venture with Dubai World to invest approximately $2.7bn in CityCenter and $2.4bn to purchase MGM Mirage common stock. The 50/50 joint venture will participate in the landmark development of CityCenter in Las Vegas. Dubai World has acquired a significant minority equity position in MGM Mirage, while Tatweer, under Dubai Holding, has a partnership with the Universal Parks and Resorts to build a $2bn theme park at Dubailand. The 505-acre development will include a 149-acre theme park along with more than 4,000 hotel rooms.

UAE-based Al Ahli Group and Marvel Entertainment have joined hands for a theme park destination being developed by AAG. The project will open in 2011 with a direct investment of more than $1bn.

Ruwaad Holdings and Paramount Licensing have a long-term licensing agreement in connection with Ruwaad’s planned development of a Paramount Pictures-branded theme park in the UAE. The planned development would be part of a $2.5bn destination.

In the energy field, the UAE is the only country allowing private ownership. Forty per cent of the Abu Dhabi National Oil Company is owned by Occidental Petroleum and ExxonMobil of the US have shareholdings in the Dolphin Project, while Bechtel has various projects in the gas sector, including a recent $1.5bn contract for facility expansion.