Middle East nations like European auto stocks

Arab countries invest in VW, Fiat, Ferrari

Arabian money
Major investors in European automakers:

DaimlerChrysler Kuwait, 7.2 percent Deutsche Bank, 6.9 percent Dubai, 2.2 percent
Ferrari Fiat, 56 percent Mediobanca, 15 percent Abu Dhabi, 5 percent
Fiat IFIL (Agnelli family is main shareholder), 30.1 percent Generali Group, 3.3 percent Libya 2.7 percent.
Sources: Bloomberg News Service, Automobilwoche research

Munich. Oil-rich Arab governments are stepping up investment in European automakers.

The Arab nations are not looking for collector's items. They want to become less dependent on oil revenues.

"The auto industry is very attractive to Arab investors," said Jochen Clausnitzer, a specialist in the Near and Middle East at DIHK, the German chamber of commerce and industry.

Clausnitzer expects more investment in European automakers.

In late July, Italian bank Mediobanca said it planned to sell a 5-percent share in Ferrari to Abu Dhabi. The price: 114 million euros. Abu Dhabi, the largest and richest of the seven emirates that make up the United Arab Emirates (UAE), has verified oil reserves that will last about 100 years.

For another UAE emirate, Dubai, time is more pressing. Dubai's reserves will last only 10 years. Dubai joined the ranks of DaimlerChrysler's top investors in January. Its 2.2-percent share in the Stuttgart-based company was worth about 750 million euros.

Kuwait is big DaimlerChrysler investor

DaimlerChrysler counts Kuwait and Dubai among its major investors. After Deutsche Bank sold part of its holdings, Kuwait became the automaker's largest investor.

One year ago, Abu Dhabi turned down an offer of a 9.8-percent stake in Volkswagen. The reason: the sides could not agree on a selling price, Volkswagen said. Now, the market value of that block of stock has grown more than 400 million euros.

Abu Dhabi may get another chance at VW. Despite the failed talks last year, the German automaker and the emirate were still able to agree on a partnership. As a result, Abu Dhabi and the privately held Saudi Olayan Group each have a stake of 25 percent in VW's LeasePlan leasing company.

Libya holds Fiat stocks

Libya is another auto stock buyer. Through its investment company Lafico, the state holds 2.7 percent of Fiat. The business relationship is the result of the traditionally close trade contacts between Libya and Italy.

The Fiat stake reached 15 percent in 1996. But Lafico had to sell back Fiat shares after Washington allegedly would have blocked the car company from bidding on U.S. government contracts.

Tags: Automakers

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