Mubadala builds GE stake to 65m shares

Mubadala Development, the strategic investment arm of the Abu Dhabi Government, has increased its holding in General Electric (GE) to 65.8 million shares as it moves towards becoming a top 10 shareholder in the largest conglomerate in the US.

The move underlines Mubadala’s commitment to an US$8 billion (Dh29.38bn) joint venture struck last summer, before the onslaught of the financial crisis on the Gulf economy.

“This is a sign that Mubadala is trying to build its position slowly. There is always a strategic decision behind it,” said Mohammed Yasin, the chief executive of Shuaa Securities. “Mubadala always has a strategic goal when it makes these kinds of investments, it is never to trade or for the short-term.”

Mubadala, which was founded in 2002, has investments of Dh22bn. They include high-profile investments such as its purchase of a 5 per cent stake in Ferrari in 2005. In 2007 it paid $1.35bn for 7.5 per cent of the US private equity firm The Carlyle Group. It also owns an 8.1 per cent stake in Advanced Micro Devices, the US chip maker.

Mubadala published its annual earnings report for the first time last month which revealed an asset base of Dh54bn.

Increased output from its oil and gas investments helped the company nearly quadruple its revenues last year to Dh6.7bn, from Dh1.8bn the year before