Abu Dhabi has announced the merger of International Petroleum Investment Company (IPIC) and Mubadala Development Company (Mubadala)
HH Shaikh Mohammad Bin Zayed, Crown Prince of Abu Dhabi, Deputy Supreme Commander of the UAE Armed Forces and chairman of the Abu Dhabi Executive Council, has issued a resolution stipulating that a joint committee be created and assigned with the responsibility of merging the businesses of the two companies.
The joint committee will be chaired by HH Shaikh Mansour Bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs, with Khaldoon Khalifa Al Mubarak serving as vice-chairman.
According to HH Bin Zayed, integrating the two entities would create greater benefits and enhanced economic value to Abu Dhabi. The combined entity will realise synergies and growth in multiple sectors including the energy and utilities sector, technology, aerospace, industry, health care, real estate and financial investments.
It will also have the ability to contribute more significantly to the diversification of the economy, in line with the Abu Dhabi Plan and the country’s long-term vision. It would also build on the creation of quality, long-term employment and development of human capital in critical sectors for the emirate.
The two companies will continue to operate independently until the joint committee concludes its assignment.
Announcing the 2014 financial results recently, Suhail Mohamed Al Mazrouei, managing director of IPIC, said, “Especially in a year of falling oil prices and difficult economic conditions, IPIC’s balanced portfolio helped navigate and surpass the market to report a net result of US$1.52bn. Last year, the group went through significant efforts in efficiency optimisation, working capital management, and liability management all adding to the bottom line. Especially important to highlight was the nearly US$3.54bn in debt pay downs, associated reductions in interest expense, and the active management of our redemption profile, strengthening IPIC’s balance sheet to successfully meet the challenges and growth opportunities of the future.
“We continue to embrace our long position in the hydrocarbon sector and will look to add key, high quality assets focused in the upstream, specialty petrochemical, and oilfield services spaces with the goal to enhancing portfolio quality and capitalising on, already realised and realisable, scale and integration opportunities and synergies.”
