Qatar hits global investment overdrive

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Target: Qatar is looking at Airbus’ parent EADS.

In the wake of a several mega takeovers by GCC state-owned holding companies, the Qatar government has taken its investment arm into overdrive over the past week.

According to reports, Qatari Investment Authority (QIA) is set to buy up to 10% of EADS, the parent company of airplane manufacturer Airbus, through its US$40bn investment fund. With Airbus on the verge of posting its first ever loss since its A380 model was delayed by two years, EADS may well be tempted to arrange a deal with the Middle Eastern financial powerhouse.

At the same time, QIA — which owns a small share in UK retail group J Sainsbury — is reported to be keen to establish a strategic stake in the supermarket chain, according to the Qatar foreign minister.

“We think they’re doing well, and this is part of what makes us interested,” said QIA’s chief executive Sheikh Hamad bin Jasim bin Jaber al-Thani.

“We’re making our own plans, we are not speculators. We believe it’s a good company. [We are looking] as a strategic investment to invest in a core business for the long term,” he added. According to the UK’s The Sunday Telegraph newspaper, a joint bid between the QIA and retailer Marks and Spencer could also be on the cards.

If QIA’s bid is successful then the investment group will acquire 769 stores, valued at around US$14.6bn.

The GCC state-owned company could however face stiff competition in acquiring J Sainsbury — currently the UK’s third largest supermarket chain after Tesco and Asda.

The latest investor to emerge as an interested party is Polygon, the US hedge fund that recently abandoned protracted takeover talks with English Premier League football club Newcastle United. Other parties reported to be interested include private equity groups CVC Capital Partners, Kohlberg Kravis Roberts, Blackstone Group and Texas Pacific.

Last October, QIA made an ultimately unsuccessful US$15.6bn bid for Thames Water, the largest water services company in the UK.

QIA had assets of around US$40bn in mid-2006 and currently owns a 7% stake in French media company Lagardere SCA — itself a major shareholder in the EADS group.

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READERS' COMMENTS

Sound advice but ill thought out pun
Posted by Roy, Doha, Qatar on Monday 26 February 2007 at 13:45 UAE time


The advice from Mr. Naidu is right. It is better to develop from the grass roots with investments and policies based on solid foundations. I however do not agree to his snide comments about Qatar being in a "race to keep pace with the growth of UAE" .  
The Qatar government has just now started enjoying the benefits or fruits of their investments into the Gas / LNG sector. Like any sensible governement would do, they are pushing aggressively into developing their countries infrastructure and investments while the going is good. "Strike while the iron is still hot" is the age old adage. The entire Oil producing world is on an upward swing (including countries like Russia, and other Soviet Bloc countries) and each country is trying to develop itself to its max. The UAE is way ahead in terms of development, thanks mainly to its oil wealth from the 1980's and the open investment policies of the emirate of Dubai since the 1990's. It is therefore very difficult to understand why the UAE all of a sudden feels that Qatar is trying to have a race with the UAE. Must be feeling the heat. Especially nowadays, it is the UAE that is trying to emulate Qatar in the fields of education and sports. Also, the government seems to be developing a bit of an inflated ego with it's policies to build the world's biggest "everything", whether it sells or not, which doesn't seem to be based on sensible principle either. 
Every country is trying to reap the benefits of it's economic upturn and develop itself. How one does it is up to it's own creativity, planning, policies luck and several other factors. Doesn't necessarily have to feel like a competion.

Good luck in the 'Race to keep pace' with UAE
Posted by Vijay Naidu, Sharjah, UAE on Sunday 25 February 2007 at 22:09 UAE time


Good show QIA. The world knows that Qatar is in race to keep pace with the growth of UAE. Let not the nation forget the need to 'right pick' when it comes to the investment decisions. What matters for them is to put their money on growing products or companies rather than on white elephants just for the pride of owning and announcing to the world. It is advised that they 'better plant seeds and water them to grow to gigantic levels' rather than make efforts to lift the fully grown trees from elsewhere. How can one be sure if they would survive in conditions not known to them despite high costs of possessing them. Good luck in the race to keep pace.

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