Abu Dhabi sovereign wealth fund ADQ said on Monday it had made an offer to take a controlling stake in Abu Dhabi Aviation and merge the helicopter operator with ADQ stakes in Etihad Engineering, AMMROC, and GAL to create a “globally competitive aviation business” with about 9.4 billion dirhams ($2.56 billion) in assets.
ADA said in a stock exchange filing it would hold a board meeting on Wednesday to discuss the offer.
ADQ would own about 59% of ADA’s entire issued share capital under the deal, ADQ said.
ADQ, the smallest of Abu Dhabi’s main state funds, started in 2018 as a holding company for government assets and has been consolidating its portfolio, privatising some assets and making strategic acquisitions to build “national champions”.
ADQ said it would combine ADA with its 100% shareholding in Etihad Engineering and Advanced Military Maintenance Repair and Overhaul Center (AMMROC) and with its 50% stake in Abu Dhabi-controlled aviation services firm GAL.
GAL is 50% owned by International Golden Group, the UAE military’s leading supplier according to IGG’s website.
It was not immediately clear how ADQ planned to merge an entity in which it does not have a controlling stake.
ADA, 30% owned by another Abu Dhabi wealth fund, Mubadala, would issue a convertible instrument to ADQ that would convert into roughly 652 million shares of ADA when the transaction closes, ADQ said in a statement.
The converted shares of ADA would be priced at 6.14 dirhams a share, implying an equity valuation of about 2.7 billion dirhams, ADQ said.
ADQ‘s Chief Executive Mohamed al-Suwaidi said in the statement that the deal would “further position Abu Dhabi as a world-leading center of aviation excellence” and create an industry “champion”.
If ADA’s board approves the transaction, it would be subject to shareholder and regulatory approvals, ADQ said.
Reuters