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Abu Dhabi fund ups share in Dubai builder Arabtec | ASHARQ AL-AWSAT English Archive 2005 -2017
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DUBAI, United Arab Emirates (AP) — Arabtec Holding, the Dubai construction giant that helped build the world’s tallest tower, said on Monday that Abu Dhabi’s Aabar Investments has acquired more than a fifth of the builder it has long pursued.

The announcement in a stock exchange filing appeared to contradict reports that Aabar had acquired a controlling stake. It did indicate, however, that Aabar is committed to building a large position in a company it gave up trying to acquire outright two years ago.

Aabar’s stake stood at 20.76 percent through the end of the last business week, Arabtec said in the filing.

The statement was in response to an article in local newspaper Alrroya Aleqtisadiya, which reported on Saturday that Aabar had acquired a 53 percent stake. Other media outlets also reported the higher figure.

Neither company responded to requests for further comment.

Aabar abandoned a bid to take over Arabtec outright in 2010 amid the turmoil caused by Dubai’s financial crisis. The government-controlled fund also owns stakes in Mercedes-Benz maker Daimler AG and Richard Branson’s commercial space travel startup Virgin Galactic.

Although Arabtec is not owned by Dubai’s government, it was heavily exposed to the emirate’s struggling property market. The scuttled 2010 tie-up with Aabar, which is backed by the oil-rich Abu Dhabi government, was seen as a way to more closely integrate the United Arab Emirates’ two most powerful sheikdoms.

The proposed $1.74 billion acquisition would have given Aabar a 70 percent stake in the builder. Neither side explained the rationale for dropping the deal, but they left the door open to future partnerships.

Aabar has since been increasing its stake in the builder. Before Monday’s disclosure, it was known to own just over 10 percent of Arabtec.

Haissam Arabi, chief executive at Gulfmena Investments in Dubai, said Aabar likely sees Arabtec as a strategic investment given Abu Dhabi’s growth plans.

“Abu Dhabi is embarking on a mega infrastructure spending spree and having an iconic name such as Arabtec, given its accomplishments and experience on mega scale projects, can win them a lot of contracts,” he said.

Arabtec’s board last week unanimously elected Aabar Chairman Khadem al-Qubaisi as its own chairman, deepening the leadership ties between the two companies.

The construction company was one of the main contractors on Dubai’s record-breaking Burj Khalifa, the world’s tallest skyscraper.

A consortium it is part of last week emerged as the lead bidder to build a major expansion of Abu Dhabi airport.