Gulf foreign acquisitions hit $40bn this year

Gulf companies have made foreign acquisitions worth more than $40 billion since the beginning of this year.Some of the biggest investments that have been announced include the $11.6 billion purchase of General Electric’s plastics business by Saudi Basic Industries (Sabic), and the successful $6.11 billion bid by a consortium led by Kuwait’s Mobile Telecommunications Company (MTC) for Saudi Arabia’s third mobile licence.In addition, Saudi investor Maan Al-Sanea has acquired around $6.81 billion worth of shares in HSBC Holdings, and Saudi Telecom Company (STC), the largest Arab telecoms operator, has said it will buy 25% of Malaysia’s Maxis for $3 billion.

The figure could rise to over $60 billion if Qatar’s $21.3 billion takeover of UK supermarket giant J Sainsbury goes ahead.Qatar has already invested $1.5 billion in Sainsbury this year through its investment arm Delta Two, and currently controls 25% of the company.The huge amount of money being poured into foreign investments is a sign of the efforts companies in the region are making to expand outside their home markets as deregulation and increased competition begin to squeeze their margins.It also shows how Gulf states are trying to reduce their reliance on oil as their primary source of income.Other significant foreign acquisitions by Gulf companies so far this year include Saudi Arabia-based National Industrialisation Company’s agreement to buy the titanium dioxide pigment business of Lyondell Chemical Company for $1.2 billion, the $965.3 million purchase of British luxury carmaker Aston Martin by a consortium headed by Kuwait’s Investment Dar, and the $848.46 million investment in European aerospace giant EADS by Dubai Investment Company (DIC). Source