Abu Dhabi's Mubadala CEO doesn’t rule out more M&A

The state fund is merging with IPIC thereby pooling investment power and consolidating operations

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The chief executive of Abu Dhabi state fund Mubadala said he did not rule out more mergers and acquisitions in the emirate after the planned merger of his institution with another of Abu Dhabi’s sovereign funds.

“From a personal point of view, there is no doubt,” Khaldoon Khalifa al-Mubarak told Abu Dhabi-based Sky News Arabia in an interview broadcast on Tuesday, when asked about the possibility of more merger activity in the emirate.

“When the benefits of a merger are clear, it is in the interests of owners. We are in a competitive world and size matters, and the more competitive capability we form would be in the interest of concerned companies,” he added, according to a transcript of the interview provided by Sky News Arabia.

Abu Dhabi said in June that it would merge Mubadala and International Petroleum Investment Co (IPIC), responding to the impact of lower oil prices by pooling their investment power and consolidating operations.

Bank merger

The emirate is also in the process of merging two big state-linked banks, National Bank of Abu Dhabi and First Gulf Bank.

Mubarak told Sky News Arabia that he expected the Mubadala merger to be completed between the fourth quarter of this year and the first quarter of 2017, creating an institution with combined assets of $125 billion (460 billion dirhams).

He said it was too early to discuss the strategy of the new fund but that the merger was being carried out “within well- studied plans”.

He said 2015 had been a tough year because of low oil prices and 2016 had also been expected to be tough.

“With what is going on in China, the oil prices and elections in more than one country that have an impact on economies, we expected a difficult year and big challenges, and all companies around the world are affected by these conditions.”

There may be some improvement next year, “but the situation may require caution and wisdom and a long-term, future-oriented outlook in managing investments.”

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