DAE in talks to buy US defence assets
Dubai's ruling family is set to acquire a series of aerospace and defence businesses across the US which will test the country's readiness to entertain Arab owners of infrastructure assets in a deal which could be valued at more than $1.5bn.
Dubai Aerospace Enterprise, which aims to create a $15bn aerospace and aviation services company, is in advanced talks with Carlyle, the private equity firm, about acquiring part of Landmark Aviation and Standard Aero, which both provide engine repair and overhaul aviation services.
DAE, which is chaired by Sheikh Ahmed bin Saeed Al Maktoum, chairman of the Emirates airline group and president of the Dubai department of civil aviation, is interested in buying only Landmark's maintenance, repair and overhaul services business.
The potential deal is likely to face tough scrutiny in Washington, where a bid for the takeover of five US port terminals by another state-owned company, Dubai Ports World, was scuppered following a congressional backlash.
Since then, however, the mood on Capitol Hill towards foreign investments has improved considerably. Lawmakers on both sides of the aisle have encouraged a more balanced approach to foreign investment, and have not raised any serious hurdles to two recent transactions by non-US companies, the merger of Lucent and Alcatel and the take-over of Westinghouse by Toshiba.
DAE and Carlyle are expected to request a full 90-day review by the committee on foreign investment, or Cfius, which vets foreign deals on national security grounds and is controlled by the Bush administration.
Both parties to the potential deal are expected to show the US government that they are willing to agree to tough conditions to win approval, including a so-called "evergreen" clause, which would allow the government to unravel the transaction at any time in the future if the companies fail to comply with an agreed security arrangement.
Although the transaction does not involve the transfer of any classified defence information, any probe is likely to take into consideration lingering questions within some quarters of the Bush administration about the transfer of materials from the UAE to Iran.
The Dubai Ports World debacle last year exposed mixed feelings about the UAE - specifically Dubai - which is seen as an ally in the US war on terror.
DAE, which is chaired by Sheikh Ahmed bin Saeed Al Maktoum, chairman of the Emirates airline group and president of the Dubai department of civil aviation, was established last year with the aim of investing $15bn in aerospace manufacturing and aviation services to make the Gulf state a leading player in the sector within 10 years. Bob Johnson, the former chief executive of Honeywell Aerospace, a US systems supplier, is chief executive of DAE.
In September 2006, DAE teamed up with Abu Dhabi to acquire Zurich-based SR Technics, the world's leading independent provider of aircraft MRO services for around $1,334m.
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=FT&Date=20070320&ID=6634302
Dubai's ruling family is set to acquire a series of aerospace and defence businesses across the US which will test the country's readiness to entertain Arab owners of infrastructure assets in a deal which could be valued at more than $1.5bn.
Dubai Aerospace Enterprise, which aims to create a $15bn aerospace and aviation services company, is in advanced talks with Carlyle, the private equity firm, about acquiring part of Landmark Aviation and Standard Aero, which both provide engine repair and overhaul aviation services.
DAE, which is chaired by Sheikh Ahmed bin Saeed Al Maktoum, chairman of the Emirates airline group and president of the Dubai department of civil aviation, is interested in buying only Landmark's maintenance, repair and overhaul services business.
The potential deal is likely to face tough scrutiny in Washington, where a bid for the takeover of five US port terminals by another state-owned company, Dubai Ports World, was scuppered following a congressional backlash.
Since then, however, the mood on Capitol Hill towards foreign investments has improved considerably. Lawmakers on both sides of the aisle have encouraged a more balanced approach to foreign investment, and have not raised any serious hurdles to two recent transactions by non-US companies, the merger of Lucent and Alcatel and the take-over of Westinghouse by Toshiba.
DAE and Carlyle are expected to request a full 90-day review by the committee on foreign investment, or Cfius, which vets foreign deals on national security grounds and is controlled by the Bush administration.
Both parties to the potential deal are expected to show the US government that they are willing to agree to tough conditions to win approval, including a so-called "evergreen" clause, which would allow the government to unravel the transaction at any time in the future if the companies fail to comply with an agreed security arrangement.
Although the transaction does not involve the transfer of any classified defence information, any probe is likely to take into consideration lingering questions within some quarters of the Bush administration about the transfer of materials from the UAE to Iran.
The Dubai Ports World debacle last year exposed mixed feelings about the UAE - specifically Dubai - which is seen as an ally in the US war on terror.
DAE, which is chaired by Sheikh Ahmed bin Saeed Al Maktoum, chairman of the Emirates airline group and president of the Dubai department of civil aviation, was established last year with the aim of investing $15bn in aerospace manufacturing and aviation services to make the Gulf state a leading player in the sector within 10 years. Bob Johnson, the former chief executive of Honeywell Aerospace, a US systems supplier, is chief executive of DAE.
In September 2006, DAE teamed up with Abu Dhabi to acquire Zurich-based SR Technics, the world's leading independent provider of aircraft MRO services for around $1,334m.
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=FT&Date=20070320&ID=6634302
