Merger of Abu Dhabi's IPIC and Mubadala creates $125-bn behemoth giant

Petroleum & petrochemicals business to account for about 31% of the merged entity

Khaldoon Khalifa Al Mubarak, MD, Mubadala Investment

Last Updated : Feb 20 2017 | 2:25 PM IST

Government of Abu Dhabi has merged two leading domestic companies - International Petroleum Investment Company (IPIC) and Mubadala Development Company – to create Mubadala Investment Company, a firm wholly-owned by the government. The merger is a strategic decision intended to create an international investment powerhouse for Abu Dhabi.

The new company, which will be valued at approximately AED 460 billion ($ 125 billion), will be organised across four investment platforms of significant scale: petroleum & petrochemicals; technology, manufacturing & mining; aerospace, information & communications technology, & renewables; and alternative investments & infrastructure.

The company’s four investment platforms will help accelerate diversification of the Abu Dhabi economy, through strategic investments across critical sectors within the United Arab Emirates (UAE) and abroad.

In terms of asset size, the platforms are petroleum & petrochemicals (31.1 percent), including significant investments in companies such as CEPSA, Nova Chemicals, Borealis and Mubadala Petroleum; Alternative investments & infrastructure (31 percent), with significant equity investments worldwide and in different sectors including health care and real estate; Technology, manufacturing & mining (21.6 percent), with significant investments in Globalfoundries, Emirates Global Aluminium, AMD, and Matsa; and Aerospace, ICT & Renewables (10.6 percent), with significant investments including Yahsat and Masdar. Corporate assets, including cash, will hold the balance (5.7 percent) of the approximately AED 460 billion ($125 billion) portfolio.

Khaldoon Khalifa Al Mubarak, managing director and CEO of Mubadala Investment Company, said, "This marks an important milestone for the new company. Committees comprised of Mubadala and IPIC leaders, have worked very hard over the past six months to put in place a proposal for a structure that will best serve the new company’s mandate. The structure, governance and world-class talent will enable the Mubadala Investment Company to be an investment powerhouse for Abu Dhabi.”