Dubai’s Shuaa in merger talks with Abu Dhabi firm

DUBAI • Dubai’s Shuaa Capital PSC started talks for a potential combination with an Abu Dhabi entity, joining a stream of mergers in the Gulf’s financial industry. The shares surged.

The investment banking firm formed a working group “to review the commercial potential along with any legal and structural aspects of the transaction” with Abu Dhabi Financial Group, according to a statement. There is no certainty that the talks will result in a deal, it said.

Consolidation among financial institutions in the Gulf has been picking up following lower oil prices. Some of the biggest banks in the United Arab Emirates, Saudi Arabia and Kuwait are in the process of combining their operations.

Abu Dhabi Financial Group, which together with the entities it controlled manages more than US$20 billion (RM81.3 billion) in assets, is the owner of Shine Investments Commercial Projects. Shine holds 48.4% of Shuaa, whose chairman Jassim Alseddiqui is the CEO of Abu Dhabi Financial Group.

Shuaa shares climbed as much as 15% in Dubai yesterday after Al Arabiya reported on potential merger talks. The stock was poised to end at the highest level in almost a month.

Shuaa has a market value of about US$207 million and had assets of US$575 million at the end of last year.

Abu Dhabi combined three of its investment firms to create a wealth fund with about US$250 billion of assets. — Bloomberg