Abu Dhabi's Mubadala Is Said to Review Assets After IPIC Merger

(Bloomberg) -- Abu Dhabi’s Mubadala Investment Co. is reviewing some of the assets it gained after its merger with International Petroleum Investment Co., according to people familiar with the matter.

The government-owned fund, which manages about $125 billion in assets, is working with consulting firm A.T. Kearney Inc. on options including asset sales and mergers within the portfolio, the people said, asking not to be identified as the information is private. The assets include chemical makers Borealis AG and Nova Chemicals Corp., as well as Japanese refining firm Cosmo Oil Co.

The review is in preliminary stages and no final decision has been made, the people said. Mubadala may also decide to keep the assets after the review, they said.

Abu Dhabi, capital of the United Arab Emirates and source of about 6 percent of the world’s proven oil reserves, is seeking to counter the erosion of its finances after crude prices fell in recent years. The government is cutting spending, tapping reserves and merging some state-owned companies. Mubadala merged with IPIC earlier this year and now ranks as the world’s 14th-largest fund, according to the Sovereign Wealth Fund Institute.

“As a global investment company, we are continually looking for ways to improve our businesses,” said Brian Lott, Mubadala’s head of communications. “That may mean significant expansion, as we have done in the energy sector already this year, or bringing in new partners, which we have also done.” A.T. Kearney declined to comment.

Technology Investments

Mubadala plans to invest in technology companies in the U.S. after opening a Silicon Valley office to manage its $15 billion commitment to SoftBank Group Corp.’s Vision Fund, Chief Executive Officer Khaldoon Al Mubarak said in an interview last week. The fund is seeking to own about 25 firms with a “broad enterprise technology focus,” the company said last month.

Sovereign wealth funds in Gulf Arab states are plowing some of their oil and natural gas billions into technology and communications to lessen their reliance on volatile crude markets and to bring home the businesses and skills that will help transform their economies.

©2017 Bloomberg L.P.