UPDATE 1-Dubai delays Doncasters takeover pending U.S probe http://today.reuters.com/investing/financeArticle.aspx?type=mergersNews&storyID=2006-03-22T135523Z_01_L22492744_RTRIDST_0_ARMS-EMIRATES-DONC
Wed Mar 22, 2006
DUBAI, March 22 (Reuters) - A Dubai firm has delayed its $1.24 billion takeover of British engineering company Doncasters Group while U.S. authorities study the security implications of the deal, a senior company official said on Wednesday.
The Committee on Foreign Investment in the United States is reviewing state-owned Dubai International Capital's acquisition of Doncasters, which operates U.S. plants making parts for defence contractors.
The takeover had been due to be completed by the end of this month. Asked whether it would be delayed, Sameer Al Ansari, chief executive of Dubai International Capital, said: "Yes." He declined to say how long the delay would be.
The Doncasters deal would give the Gulf Arab company control of several U.S. plants that make aerospace turbines, turbine blades, and airfoils for aircraft engines.
Earlier this month, government-owned Dubai Ports World agreed to relinquish control of six U.S. ports it had acquired from British firm P&O (PO.L: Quote, Profile, Research) after the deal provoked a political storm in the United States.
Some U.S. lawmakers said the P&O deal would undermine security by handing the ports to a state-owned company in the United Arab Emirates, a country that once recognised Afghanistan's Taliban regime and was the home of two Sept. 11 hijackers.
President George W. Bush has defended Dubai, a frequent port of call for U.S. warships, as a staunch ally in the war on terrorism.
Dubai International Capital said earlier this month it was confident that it would get U.S. approval for the Doncasters deal and was cooperating with U.S. regulators. Dubai International agreed in December to buy Doncasters from Royal Bank of Scotland's (RBS.L: Quote, Profile, Research) equity finance business.
An initial U.S. government probe approved the deal in February but the White House agreed to a fresh 45-day security review in the wake of the political storm generated by the Dubai Ports deal. The second probe would finish in early April.
The deal would be the latest in a string of international acquisitions for the Dubai firm, one of several Gulf Arab government-linked investors looking to use record oil revenues to diversify their holdings.
Dubai International Capital purchases include Britain's Tussauds Group, owner of Madame Tussauds waxworks, and a stake in car maker DaimlerChrysler (DCXGn.DE: Quote, Profile, Research).
© Reuters 2006.