Qatar said on Monday it was in talks with Airbus parent EADS about buying as much as a 10 percent stake in the European aerospace company, part of its wider effort to diversify cash from natural gas production.
“We are discussing but when, first of all we need to see the right conditions at the right price,” Qatari Foreign Minister Sheikh Hamad bin Jasim bin Jabr al-Thani told Reuters in London.
The minister, who is also head of state controlled Qatar Investment Authority (QIA), said he wanted to know more about EADS’s plans before making a purchase. He was not more specific.
Qatar is moving to try to use natural gas revenues to diversify the domestic economy. The Gulf nation holds the world’s third largest natural gas reserves.
Asked to comment on an earlier media report Qatar was considering a 10 percent stake, Sheikh Hamad said: “It is correct but it is still in the very early stages.”
Asked if Qatar might buy more than 10 percent, Sheikh Hamad said: “We don’t have ambitions to have more. Everything is possible but, not in our minds, something more at the moment.”
He would not be more specific about what price Qatar might buy the stake for.
Qatar Airways is a major customer of Airbus, which confirmed on Feb. 28 plans to slash 10,000 jobs in a restructuring.
The QIA already has an indirect ownership stake in EADS through shareholdings in Lagardere.
“We own over 7 percent of (Lagardere),” Sheikh Hamad said. That makes the QIA the third largest shareholder in Lagardere and marks a 1 percent increase in its ownership stake since June 2006, according to Reuters data.
The discussions with EADS are the latest move by the QIA to diversify its gas revenues, which Sheikh Hamad said are being put to work with heavy portfolio investment, but would not disclose the size of the fund.
“As a government we don’t disclose this number, but it is growing fast,” he said.
The QIA manages about $40 billion in assets compared with $500 billion for the UAE’s Abu Dhabi Investment Authority, according to one estimate by Standard Chartered bank.
“At the moment we are heavily invested in tourism, property, portfolio investments in Asia and America,” he said. “We are looking now to expand into retail … Mainly we are starting in Asia and in some countries in Europe.”
The market has been rife with speculation that QIA is making a move to invest in the UK’s third largest supermarket J. Sainsbury.
Sheikh Hamad would not be drawn on the speculation, only saying he sticks by what he told the Daily Telegraph newspaper in February that he was “interested” in the supermarket group.
Elsewhere, the QIA is looking to invest in more Chinese banks and infrastructure projects in India.
Other investments include the creation of two investment funds, one with the government of Indonesia and one with the government of Malaysia.
Each fund would be worth $1 billion and divided 50/50, he said.
Qatar’s currency, the riyal, is pegged to the U.S. dollar.
Sheikh Hamad said he would not speculate on the value of the currency but said as far as the QIA was concerned, there was a large amount of currency diversification in its investments.
“We already take measures to put some of our investments in other currencies, such as Asian, the euro, the UK. But still the dollar is an important currency for us,” he said.
“All the other currencies, maybe we have more than half in terms of actual investments, that is to say more than 50 percent invested outside of the U.S. dollar.”
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