UPDATE 2-Dubai acquires $1 bln stake in Standard Chartered http://today.reuters.com/news/articleinvesting.aspx?view=CN&storyID=2006-10-06T193333Z_01_L06927681_RTRIDST_0_FINANCIAL-EMIRATES-STANCHARTERED-UPDATE-2.XML&rpc=66&type=qcna
Fri Oct 6, 2006
(Updates throughout with quotes from Isthithmar executive)
By Firouz Sedarat
DUBAI, Oct 6 (Reuters) - Dubai acquired a stake of around 2.7 percent in Standard Chartered Plc (STAN.L: Quote, Profile, Research) for $1 billion, saying on Friday it was attracted to the London-based bank's strong focus on Asia and strategy of acquisition-led growth.
The Gulf emirate took the stake through its investment arm Istithmar, one of several vehicles it has used to make high-profile acquisitions around the world -- from New York real estate to British ports operator P&O.
Istithmar completed a leveraged structured investment of around $1 billion, a company statement said without giving details of the transaction. The stake would be equal to around 2.7 percent of bank's stock, it said. "Istithmar supports the incumbent management team at Standard Chartered and fully endorses their strategic vision," Sultan Ahmed Bin Sulayem, executive chairman of Istithmar said.
He told Reuters Istithmar was attracted to Standard Chartered's strategy of making acquisitions and its focus on emerging markets. Asia, the Middle East and Africa account for 90 percent of Standard Chartered's revenue. "They are strong in markets where we are strong. Asia in particular. Asia is very important to us," Bin Sulayem said.
Standard Chartered has been on an acquisition drive for years, paying $1.2 billion last month for Hsinchu International Bank, Taiwan's seventh-biggest private sector bank.
Companies based in Dubai and other parts of the oil-exporting United Arab Emirates, Standard Chartered fifth largest market by revenues, have been ploughing petrodollars into Asian property, petrochemical plants, telecoms and ports.
Dubai is the largest foreign investor in Pakistan, where in August Standard Chartered agreed to pay $511 million for Union Bank, the country's eighth-biggest bank.
Set up in 2003, Istithmar is owned by the government of Dubai, the Gulf's trade and tourism hub, which is scouring the globe for assets as part of a drive to diversify its economy and compensate for dwindling oil revenues. Other countries in the world's top energy exporting region are following suit, hoping that strategic investments will sustain economic growth when oil prices fall after their rally to record highs over the past two years.
Bahrain-based financial investor Arcapita is taking over Viridian Group Plc (VRD.L: Quote, Profile, Research), Northern Ireland's main electricity supplier, in a 1.62 billion pound ($3.05 billion) deal announced on Friday.
($1=.5304 Pound)
(Additional Reporting by Dayan Candappa and James Cordahi)
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