Abu Dhabi Wants A Second Date With Daimler
Reuters reports that Aabar Investments is considering increasing their stake in Daimler AG from 9.1% to 15%. Aabar is already Daimler largest shareholder and this move, should it happen, will further cement this position. The Abu Dhabi investment fund paid $2.7 billion for the 9.1% stake when the share price €20.77. Since then, the share price of Daimler has rocketed 77% and on the news of Aabar mulling a bigger stake, the share price rose by 4.4% to €35.81 per share. Daniel Schwarz, an analyst with Commerzbank AG said “It’s a positive signal that a large shareholder is showing a long term commitment”. But the strength of the fund’s love for Daimler doesn’t just extend to this increased stake.
You see, the reason Aabar are thinking of this idea is because they have already formed a joint venture with Daimler to buy the 2009 F1 constructor’s champion, Brawn GP. Aabar and Daimler have bought 75.1% of the British company, which was formerly the Honda team, with Daimler taking 45.1% of Brawn GP and Aabar taking 30%. But this isn’t enough for Aabar.
“What I like about Daimler is that each quarter they come up with new ideas and so each quarter you will see us finalising deals with them,” said Khadem Abbdulla Al-Qubaisi, the managing director the International Petroleum Investment Company, who own 71% of Aabar. He then carried on “There is, in the pipeline, two to three projects we will do together.”. Is this the start of a beautiful partnership? Or a takeover by salami tactics?
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We'll start to see a lot more of this as the Arab world's economy transitions from oil production to finance. These guys have INSANE amounts of money, but it's all predicated on what's in the ground, and what's in the ground isn't going to be there forever.
“What I like about Daimler is that each quarter they come up with new ideas..." Makes sense, from an investor's point of view. Hopefully, these new ideas are good ones.
Makes sense! Mercedes just purchased 75% of F1 Constructor Champion Team Brawn GP - now Mercedes GP - in part with backing from Aabar. So - once again we will see Mercedes vs. Ferrari competing as branded head-to-head teams in the World Driver's and Constructors Championships in 2010...and BOTH have significant backing from Abu Dabi. I predict that, as Abu Dabi emerges as a financial powerhouse, we'll see Barak Obama begin to use his middle name. May help back-up the US deficit - which we will need. Before you all dismiss me read this: it's all about branding. Every little bit of it!