Dubai's Arabtec could buy Kuwaiti company
Billion dollar deal is at advanced stage according to reports
Arabtec Holding, Dubai's largest listed construction firm, is in the advanced stages of talks to fully acquire a construction company in Kuwait's Kharafi Group, according to a report in the Abu Dhabi-based Al-Ittihad newspaper.
The Dubai firm is in talks with Kharafi National, a Kuwait-based contractor and facilities management firm which has operations in several Middle Eastern countries, to buy all its assets and operations.
A report in Al-Ittihad on Monday valued the possible deal at about AED5.5bn; it quoted unnamed sources.
A formal agreement is expected in two to three months, sources told Reuters. Arabtec declined to comment; Badr Kharafi, who assumed control of the family conglomerate following the death of his father Nasser in 2011, declined to comment when contacted by the news agency.
It is claimed the acquisition is part of Arabtec's aggressive regional strategy to enter partnerships and acquire competitors, and eventually create a pan-Gulf construction firm.
The builder, in which Abu Dhabi state fund Aabar has a 22% stake, making it the largest single shareholder, replaced Arabtec's founder and chief executive Riad Kamal with Abu Dhabi-based private investor Hasan Abdullah Ismaik last year, and embarked on an ambitious growth strategy.
Arabtec entered into partnerships with South Korea's Samsung Engineering and GS Engineering & Construction, and has acquired other, smaller regional companies.
Its relationship with Aabar has helped the builder clinch several projects, including a $6.1bn deal, its biggest ever, to build 37 towers in Abu Dhabi and Dubai.
The company last year denied media reports that it was in talks to merge its operations with Kuwait's Combined Group Contracting Co (CGCC) and Saudi Arabia's Saudi Oger.
Kharafi Group, which owns Kharafi National, is one of the biggest family conglomerates in Kuwait with interests in real estate, retail and financial services. It is thought to control, through various entities, around a quarter of telecommunications operator Zain.
Headquartered in Kuwait, Kharafi National has operations in the United Arab Emirates, Qatar, Saudi Arabia, Egypt, Lebanon and Bahrain, and has a workforce of around 30,000 people.