Abu Dhabi Merges IPIC and Mubadala

Two investment companies owned by the Abu Dhabi government - International Petroleum Investment Company (IPIC) and Mubadala – have merged to form Mubadala Investment Company. Completed on Jan. 20, the merger has created a new group with combined total assets of $125 billion and interests spanning an eclectic mix of oil and petrochemicals to healthcare and real estate.

IPIC is a major investor in the global chemical industry with equity stakes in Borealis and Nova Chemicals. It also owns Spanish refiner Cepsa and has a stake in Austria’s OMV. Mubadala has stakes in Emirates Global Aluminium, green-energy firm Masdar, GE and private equity company Carlyle Group, among others. Mubadala and IPIC are said to manage roughly the same amount of assets, with few overlaps. Mubadala’s focus has been on the Abu Dhabi economy while IPIC has mainly invested overseas.

First announced on Jun. 29, 2016, the merger is part of the emirate’s move to become more financially efficient in a time of low oil prices and falling income. Mubadala said it was a strategic decision intended to create an international investment powerhouse for Abu Dhabi. The group added that the scale, balanced portfolio and expertise of the combined entity will bring commercial opportunities across more strategic sectors all over the world, underpinning the emirate’s long-term economic diversification.

The merged group will be organized across four investment platforms: petroleum and petrochemicals; technology, manufacturing and mining; aerospace, information and communications technology and renewables; and alternative investments and infrastructure. Petroleum and petrochemicals account for 31.1% of the new company’s total assets.