A Dubai company is nearing completion of a $1.8 billion takeover of two US aviation companies, in a deal that New York Democratic Senator Chuck Schumer has said “raises security questions”.
Schumer told the Financial Times earlier this year that the takeover of two US aircraft-servicing companies by Dubai Aerospace Enterprise (DAE) was “not as much of a security risk as Dubai Ports World, but because it deals with maintenance of aircraft, it certainly raises security questions.”
DAE is set to buy Standard Aero Holdings and Piedmont/Hawthorne Holdings from private equity firm Carlyle Group for $1.8 billion, according to a regulatory filing on April 2.
However, the deal still needs US government approval, and is likely to face debate in Washington, where last year’s US port purchases by Dubai’s state-owned DP World triggered a political firestorm.
Both Democrats and Republicans feared that giving a state-owned Arab firm control of US port terminals would pose a threat to national security. DP World later agreed to sell the port operations to soothe US congressional concerns.
Schumer, who has been vocal about the DAE deal, also led the opposition to the Dubai Ports deal.
Michael Killian, DAE’s treasurer, told Reuters that the funding for the transaction is complete. He denied a report in the London-based Middle East Economic Digest that DAE was considering selling Islamic bonds to finance expansion.
DAE has said it plans to invest $15 billion in the aviation business, including leasing of aircraft and airport development. Most of the investment will be by the end of this year, according to the company’s website.
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