DUBAI, United Arab Emirates, (AP) — Qatari investors’ decision this week to pump half a billion euros into the merger of Greece’s second and third largest banks is part of a strategy to both expand the Gulf nation’s European investments and boost its international standing, analysts said Tuesday.
The $720 million deal is the latest in a shopping spree that has significantly boosted Qatar’s European holdings in recent months, adding to longer-held stakes in continental icons such as Barclays PLC, Credit Suisse Group, Volkswagen AG, and the London Stock Exchange. Just last week, Qatar’s sovereign wealth fund snapped up a 2 percent stake in power company Energias de Portugal.
Qatar is not the only energy-rich Gulf state spending heavily on the continent. But the emirate — home to the world’s third largest natural gas reserves — stands out because the diverse investments are more than shrewd business moves. They have become a key vehicle through which Qatar is trying to boost its foreign policy standing.
“Qatar gets noticed as a responsible financial (partner) that helps out European countries” through deals such as this week’s investment in the merger of Greece’s Alpha Bank and Eurobank, said Eckart Woertz, a German expert on the Mideast at Princeton University.
The dealmaking push comes as Qatar seeks to boost its voice in the international arena. The country has often been eclipsed in the region by bigger players, including oil titan Saudi Arabia and political powerhouse Egypt.
The tiny Gulf nation played an outsized role in the NATO-led intervention in Libya — a cause championed by European heavyweights France and Britain — by contributing warplanes to enforce a no-fly zone and providing support to rebels seeking to oust leader Muammar Gaddafi.
Best known for bankrolling the outspoken pan-Arab satellite network Al-Jazeera, Qatar is looking to expand beyond the airwaves and has, over the years, played mediator roles in conflicts such as Sudan’s Darfur region and internal power clashes in Lebanon. It will also host the 2022 World Cup, an event widely seen as allowing it to spotlight its meteoric growth on a global stage.
“Qatar is eager to be in the international spotlight,” Woertz added. Investing in Europe “puts them on the map, and gives them a political lever,” he said.
The Greek bank deal announced Monday will eventually give Qatari investment fund Paramount Services Holding Ltd. a 17 percent stake in what is expected to become Greece’s largest lender, according to a bank presentation for shareholders.
Paramount is described as “a company representing the business interests of the most prominent family in Qatar” — strongly suggesting it enjoys the backing of the ruling emir’s Al Thani clan. Officials for the little-known fund couldn’t be reached.
The Energias de Portugal buy-in, valued at around 160 million euros ($231 million) based on market prices when it was disclosed Thursday, was carried out by one of Qatar’s better-known investors, Qatar Holding. It is the main investment arm of the Qatar Investment Authority, the nation’s sovereign wealth fund.
Just months earlier, Qatar Holding agreed to buy more than 6 percent of Spanish power utility Iberdrola SA for 2.02 billion euros, then worth $2.82 billion.
Victoria Barbary, a London-based analyst at consulting firm Monitor Group, said both of the power deals give Qatar exposure not only to Europe but also fast-growing markets in Latin America.
Other Qatari investments are more directly focused on the continent itself.
Late last month, a Qatari government developer and the London-based Canary Wharf Group, a real estate firm partly bankrolled by Qatar, laid out plans to redevelop the area around oil giant Shell’s main London office on the River Thames. Qatari Diar Real Estate Investment Co. and Canary Wharf Group will each pay 150 million pounds ($245 million) to secure rights to the site.
In late May, a sports investment company set up by Qatari crown prince Sheik Tamim Bin Hamad Al Thani bought a 70 percent stake in French soccer team Paris Saint-Germain. Another member of the ruling family already owns Spanish club Malaga, and the state-sponsored nonprofit group Qatar Foundation is paying 30 million euros a season to put its logo on the jerseys of Spanish team Barcelona.
In December, Qatar Holding agreed to pay 400 million euros (then worth $530 million) for just over 9 percent in Germany’s largest builder Hochtief AG, which is involved in several large infrastructure projects in the fast-developing country.
Barbary expects Qatar’s interest in Europe will continue to grow, in part because it lacks the long-standing ties older Gulf investors have to other developed markets such as the United States.
“They’ve not really cracked the U.S.,” she said. “They’ve started off in Europe, and that’s where their focus is at the moment. … I don’t see any particular reason why they’d change that.”