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Thu 24 Jun 2010 12:42 PM

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Abu Dhabi’s Aabar Buys 4.99% of Italy’s Unicredit

UPDATE 1: The firm's CEO confirms the stake deal in Italy's biggest bank.

Abu Dhabi’s Aabar Buys 4.99% of Italy’s Unicredit

Aabar Investments, the Abu Dhabi-based company that is the largest shareholder in Daimler AG, bought a 4.99 percent stake in Italy’s UniCredit SpA, Chief Executive Officer Mohamed Badawy Al-Husseiny said.

“The financial services sector is something we are interested in,” Al-Husseiny said in a phone interview on Thursday from Abu Dhabi. Aabar bought the stake on the market, he said.

A spokeswoman for UniCredit in Milan declined to comment. Radiocor news agency reported the news earlier today.

Aabar’s stake in UniCredit, Italy’s biggest bank, is valued at about 1.84 billion euros ($2.3 billion), based on yesterday’s closing price. It makes the company the lender’s second-largest shareholder after Mediobanca SpA, and ahead of a foundation that owns 4.98 percent, according to regulatory filings this month. The Central Bank of Libya owns about 4.6 percent.

Aabar, which acquired American International Group Inc.’s private banking unit, bought 49.8 million euros of UniCredit’s convertible bonds in March 2009. The bonds are exchangeable into ordinary shares and mature in 2050.

The Italian bank this year raised 4 billion euros by selling new shares and is shedding non-strategic assets and cutting costs to strengthen its capital. Among the businesses it’s reviewing, UniCredit is discussing options for its Pioneer Global Asset Management division. The lender in May reported 16 percent increase in first-quarter profit to 520 million euros, helped by trading income.

Aabar said on June 22 that it may consider plans to delist from the Abu Dhabi exchange. The board meets today to discuss calling a shareholders’ meeting to convert it into a private joint-stock company and cancel the stock listing on the bourse.

Aabar lost 4.6 percent to 1.68 dirhams as of 12:44 p.m. in Abu Dhabi. UniCredit slipped 1.3 percent to 1.89 euros in Milan. (Bloomberg)

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