November 28, 2007
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A $7.5 billion Abu Dhabi deal to buy Citigroup Inc shares may have created a model for acquisitions by Gulf and other emerging-market investors scouring the ruins of the U.S. mortgage crisis for bargains.
The Abu Dhabi Investment Authority (ADIA) sought no role in managing Citi, allowing the world's wealthiest sovereign fund to invest as a saviour of the largest U.S. bank without the risk of being perceived in the United States as an Arab predator.
Investors from Dubai to China could be considering similar deals with cash-strapped U.S. banks, hoping to ride a recovery in their stocks and avoid the political barriers that could have been thrust in their path in better times, analysts said.
"There will be more such investments," said Giyas Gokkent, head of research at the National Bank of Abu Dhabi.
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Abu Dhabi's 4.9 percent stake will make it Citigroup's single largest shareholder, overtaking Prince Walid bin Talal of Saudi Arabia. He has owned close to a 5 percent stake since the early 1990s, when he made a similar investment to bail out the company.
Together, their holdings will mean that nearly 10 percent of the Citigroup will be owned by Middle Eastern investors.
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– New York Times |
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