DUBAI (Reuters) – Dubai’s DIFC Investments signaled on Monday it could spend around $1.8 billion to buy into an unnamed publicly traded global financial services firm after becoming Deutsche Bank’s fifth-largest shareholder.
The target, which is not a bank, is among 20 firms the government agency is “seriously” considering investing in, DIFC Investments Managing Director Bisher Barazi told reporters. Five of the acquisitions are at the due diligence phase, he said.
Barazi declined to identify any of the targets, but said one of the five was similar to Deutsche Bank, in which DIFC investments bought a 2.2 percent stake earlier this year.
The target was not a bank, Barazi later told Reuters.
“It will be of a similar monetary scope and profile,” he said of the value of the deal.
The Deutsche bank purchase was worth about 1.35 billion euros ($1.84 billion) at the time the deal was announced in May. Barazi declined to say how much DIFC Investments paid for the shares.
Turmoil in global credit markets triggered by defaults in U.S. home loans for people with poor credit offered DIFC Investments more choice in its acquisitions by making assets cheaper, Barazi said.
“What is happening globally makes us more interested. The potential is very good. There is more on the table,” he said.
Other state-owned Gulf investors such as Abu Dhabi-based Mubadala Development Company and Dubai International Capital have said the rising borrowing costs were making it easier to compete with private equity funds, which rely on cheap credit.
DIFC Investments’ targets include companies in the United States, Asia and Europe, said Barazi, whose agency is an arm of the Dubai International Financial Centre.
Dubai built the centre to create a financial services hub in the heart of the world’s biggest oil-exporting region. DIFC’s Governor Oman bin Sulaiman said in March Dubai planned to build two of the world’s 10 largest financial institutions by 2015.
Dubai pooled its stock exchange holdings in July into a company called Borse Dubai, which has offered to take over Nordic exchange operator OMX for $4 billion.
Barazi, whose agency is a shareholder of Borse Dubai, declined to comment on the OMX bid.