Qatar hits global investment overdrive

The Qatar government has taken its investment arm into overdrive over the past week.
Qatar hits global investment overdrive
By Andrew Mernin
Sun 25 Feb 2007 12:00 AM

In the wake of a several mega takeovers by GCC state-owned holding companies, the Qatar government has taken its investment arm into overdrive over the past week.

According to reports, Qatari Investment Authority (QIA) is set to buy up to 10% of EADS, the parent company of airplane manufacturer Airbus, through its US$40bn investment fund. With Airbus on the verge of posting its first ever loss since its A380 model was delayed by two years, EADS may well be tempted to arrange a deal with the Middle Eastern financial powerhouse.

At the same time, QIA — which owns a small share in UK retail group J Sainsbury — is reported to be keen to establish a strategic stake in the supermarket chain, according to the Qatar foreign minister.

“We think they’re doing well, and this is part of what makes us interested,” said QIA’s chief executive Sheikh Hamad bin Jasim bin Jaber al-Thani.

“We’re making our own plans, we are not speculators. We believe it’s a good company. [We are looking] as a strategic investment to invest in a core business for the long term,” he added. According to the UK’s The Sunday Telegraph newspaper, a joint bid between the QIA and retailer Marks and Spencer could also be on the cards.

If QIA’s bid is successful then the investment group will acquire 769 stores, valued at around US$14.6bn.

The GCC state-owned company could however face stiff competition in acquiring J Sainsbury — currently the UK’s third largest supermarket chain after Tesco and Asda.

The latest investor to emerge as an interested party is Polygon, the US hedge fund that recently abandoned protracted takeover talks with English Premier League football club Newcastle United. Other parties reported to be interested include private equity groups CVC Capital Partners, Kohlberg Kravis Roberts, Blackstone Group and Texas Pacific.

Last October, QIA made an ultimately unsuccessful US$15.6bn bid for Thames Water, the largest water services company in the UK.

QIA had assets of around US$40bn in mid-2006 and currently owns a 7% stake in French media company Lagardere SCA — itself a major shareholder in the EADS group.

For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.