Abu Dhabi buys 9.1% of Daimler AG for $2.5 billion

Daimler’s Supervisory approved yesterday a capital increase which will give state-backed Aabar Investments PJSC of Abu Dhabi a total of 9.1 percent. Issued at a price of €20.27 ($27.47 USD) per share, the total investment by Abu Dhabi’s Aabar comes in at  €1.95 billion ($2.5 billion USD).

“We are delighted to welcome Aabar as a new major shareholder that is supportive of our corporate strategy. We look forward to working together to pursue joint strategic initiatives,” said Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG.

Daimler will now have two major shareholders including Abu Dhabi and Kuwait. Kuwait has held an equity in Daimler AG since 1974.

Make the jump for the press release for more details.

Press Release:

Abu Dhabi”s Aabar Investments to become a major Daimler shareholder

– Daimler increases share capital by 10% with exclusion of subscription rights of existing shareholders
– After acquiring all new shares, Aabar will hold 9.1% of the new share capital
– Issue price of €20.27 per share close to the current market price
– Total investment of €1.95 billion further strengthens Daimler”s sound capital base and offers additional flexibility to invest in new automotive technologies
– Platform for joint strategic initiatives established
– Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG: “We are delighted to welcome Aabar as a new major shareholder that is supportive of our corporate strategy. We look forward to working together to pursue joint strategic initiatives.”

– HE Khadem Al Qubaisi, Chairman of Aabar: “Daimler is an iconic brand and a financially strong company with a reputation for excellence worldwide. We are delighted to having received the opportunity to be making this investment.”

Stuttgart ““ Daimler AG (stock-exchange abbreviation DAI) welcomes Aabar Investments PJSC (Aabar) of Abu Dhabi, as a major investor. Daimler increases the share capital by approx. 10% with exclusion of subscription rights of existing shareholders. After acquiring all new shares, Aabar will hold approx. 9.1% of the new share capital. The capital increase was approved by Daimler”s Supervisory Board today.

Aabar is an investment company headquartered in Abu Dhabi and is listed on the Abu Dhabi Securities Exchange. It directly invests in various sectors including energy, infrastructure, real estate, automotive and financial services companies. Its largest stakeholder is the International Petroleum Investment Company (IPIC), which in turn is wholly owned by the Government of the Emirate of Abu Dhabi.

The capital increase will be carried out by issuing 96,408,000 new registered no par value shares of Daimler”s Authorised Capital approved by the Annual Shareholders´ Meeting of April 9, 2008 in exchange for cash contributions. Existing shareholders” rights to subscribe to these new shares are excluded. The issue price of the shares is €20.27 per share, resulting in an equity contribution for Daimler of €1.95 billion.

Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars: “We are delighted to welcome Aabar as a new major shareholder that is supportive of our corporate strategy. We look forward to working together to pursue joint strategic initiatives.”

Khadem Al Qubaisi, Chairman Aabar: “Daimler is an iconic brand and a financially strong company with a reputation for excellence worldwide. We are delighted to have the opportunity to make this investment and are excited by the commercial potential of our partnership. We believe that our future cooperation will be beneficial for Aabar and create social and economic benefits for Abu Dhabi and the United Arab Emirates. We look forward to working with Daimler to fully realize these opportunities.”

The future cooperation will focus on joint initiatives in the following areas:

– Electric vehicles with a particular focus on projects aiming at the reduction of CO2-emissions.

– Development and/or production of innovative compound materials to be used in automotive manufacturing.

– Social projects such as the establishment of a training centre in Abu Dhabi to educate young talent for positions in the automotive industry.

The cash inflow from the capital increase of €1.95 billion will further improve Daimler”s sound financial position. At the end of 2008, the equity ratio of Daimler”s industrial business was 42.7% and the equity ratio of the entire Daimler Group was 24.3%.

The investment complements a broad range of initiatives already undertaken by Daimler to react to the changing market environment, further strengthens its solid capital base and gives even greater flexibility to invest in innovative automotive technologies during a period of economic uncertainty and macroeconomic instability.

With Abu Dhabi and Kuwait, Daimler will have two major shareholders in the future. Kuwaithas held an equity interest since 1974. Following the capital increase, the equity interest held by Kuwait will amount to 6.9%.

– By: Omar Rana