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Fri 5 Mar 2010 07:58 AM

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Arabtec-Aabar deal on track, expansion planned

$1.7bn merger of Dubai contractor & Abu Dhabi firm to be completed in April.

Arabtec-Aabar deal on track, expansion planned
BIG DEAL: Under the agreement, Aabar in January had agreed to acquire a 70 percent stake in Arabtec.(Getty Images)

 

The $1.7bn merger of Dubai contractor Arabtec and Abu Dhabi's Aabar Investments will be completed in April and will help ease a funding squeeze and boost growth, Arabtec's CFO said.

 

The deal between the UAE's largest builder by market value and Aabar may pave for a revival of projects in Abu Dhabi and help expansion in Saudi Arabia and Azerbaijan, Ziad Makhzoumi told Reuters Insider.

 

"(The deal) will bring to us new opportunities in oil, gas and infrastructure. And it will bring to us funding. Not that we need it, but if we have it we can reduce the dependency on the banks, especially in our expansion. A lot of banks have limited resources and are cautious on lending," he added.

 

Under the agreement, Aabar in January had agreed to acquire a 70 percent stake in Arabtec.

 

"Both of us underestimated the work that has to be done. That's why it was decided to expand the date to another 60 days. And we hope that by then we will have a deal in one way or another. I don't believe any surprise will come up with due diligence," Makhzoumi said. (Reuters)

 

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