July Fourth Week Middle East Finance Newsletter
Adnoc Boosts Covestro Takeover Bid to €11 Billion, Canada’s CDPQ Weighs Boosting Stakes in Key Dubai Assets, Turkey Gets $51 Billion Pledge of Economic Support From UAE.
Adnoc Boosts Covestro Takeover Bid to €11 Billion
Key Takeaways
Abu Dhabi National Oil Co. has increased its takeover offer for Covestro AG to about €11 billion ($12.4 billion) in its bid to expand its chemical operations.
Covestro shares fell 2.9% in response to the increased offer, but negotiations are ongoing and the response from Covestro is still unclear.
Adnoc's CEO has been actively seeking deals to compete with Saudi Aramco, and the company is also in talks for a potential merger with OMV AG to create a chemicals and plastics giant.
Canada’s CDPQ Weighs Boosting Stakes in Key Dubai Assets
Key Takeaways
Caisse de Depot et Placement du Quebec is in talks to increase its holdings in Dubai's shipping and logistic assets, including Jebel Ali Port and the Jebel Ali Free Zone.
The Canadian pension fund is considering investing billions of dollars in these assets, and discussions are ongoing to raise financing for the deal.
This move comes after CDPQ's previous multi-billion investment in the same assets in June 2022, helping DP World improve its balance sheet and reduce leverage.
UAE Chases 7% Growth to Double Economy to Over $800 Billion
Key Takeaways
The UAE's economy grew by almost 8% in 2022, driven by higher crude prices and production. However, the International Monetary Fund projects a slower GDP growth of 3.5% for this year.
The UAE is actively seeking bilateral trade deals and partnerships to achieve its goals and is confident in its policies to navigate potential challenges like slower Chinese growth or disruptions to the global financial system.
As part of its efforts to become a global hub for business and finance, the UAE has been signing trade deals worth billions of dollars with countries like India, Indonesia, Turkey, and recently pledged significant financial support for Turkey during President Erdogan's visit.
Turkey Gets $51 Billion Pledge of Economic Support From UAE
Key Takeaways
The United Arab Emirates has pledged to provide significant support to Turkey's economy, potentially worth over $50 billion, signaling a breakthrough in their previously strained relationship.
The agreements include the purchase of $8.5 billion worth of bonds by UAE's wealth fund ADQ to aid Turkey's post-earthquake reconstruction efforts.
Turkish President Erdogan's Gulf tour has yielded significant deals, including military drone sales with Saudi Arabia, as he seeks to attract investments and stabilize Turkey's financial situation.
BlackRock Appoints CEO of Oil Giant Aramco to Its Board
Key Takeaways
BlackRock's appointment of Saudi Aramco CEO to its board highlights its commitment to the oil industry amidst the ESG investing debate.
The move potentially protects BlackRock from criticism while also signaling the importance of including oil and gas in the transition to a low-carbon economy.
There is a risk of client uneasiness as Aramco becomes a more influential voice within BlackRock, especially for those who exclude Aramco from their investment portfolios.
Abu Dhabi Edtech Firm Alef Education Considers an IPO
Key Takeaways
Abu Dhabi-based edtech firm Alef Education is considering an IPO in the UAE as student enrollments surge, reflecting the growing demand for technology-driven education solutions.
The UAE has seen a boom in IPOs driven by government-owned firms, and private companies like Alef Education are now exploring listing options to expand capital markets and attract new investors.
The adoption of artificial intelligence tools, including AI-powered market analytics platforms like Toggle AI, is on the rise in the financial sector, but concerns about regulation and accuracy of results remain.
EU Ready to Boost Links to Turkey But Accession Still Taboo
Key Takeaways
The EU foreign ministers are open to developing closer ties with Turkey but are cautious about Ankara's calls for EU membership and visa liberalization.
Resolving tensions over Cyprus and addressing concerns about human rights and the rule of law are crucial for any re-engagement with Turkey.
EU membership for Turkey is still off the table due to ongoing human rights issues, and progress will be hindered until these concerns are addressed.