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Wed 16 May 2007 02:59 PM

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Dubai's DIFC buys $1.8bn Deutsche stake

The 2.2% stake in the bank follows last year's investment in exchange operator Euronext.

Dubai's DIFC Investments has bought a 2.2% stake in Deutsche Bank AG, a spokesman for the state-owned investment agency said on Wednesday.

The stake would be worth around 1.35 billion euros ($1.83 billion) at Tuesday's closing price, although the spokesman declined to say how much DIFC Investments had paid and when it bought the shares.

"I can confirm that DIFC Investments has bought the stake," the spokesman said.

DIFC Investments is an arm of the Dubai International Financial Centre, which the government set up to build a financial services hub in the Gulf Arab emirate.

The DIFC, a dollar-based investment zone with it own laws and courts, said in March it would spend more than $2 billion on acquisitions this year including a stake in a Western European financial services company.

In April last year it bought a stake in pan-European exchange operator Euronext and raised that to 3.48 percent in May.

Dubai, commercial hub of the world's top oil exporting region, aims to build two of the world's 10 largest financial institutions by 2015, DIFC Governor Omar bin Sulaiman said in March.

This is third time in the past seven months investors linked to the Dubai government have bought into a large Western European bank.

On May 1 state-owned Dubai International Capital said it had bought a stake in HSBC Holdings Plc for a fund it manages, becoming one of the largest shareholders in Europe's biggest bank. It did not give the size of the purchase.

In October, government-owned Istithmar bought 2.7% of London-based Standard Chartered Plc.

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