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World’s fifth largest aluminium producer
Sheikh Mohammed Al Maktoum, ruler of Dubai said 'the company is Emirati, and the goal is global'.
June 4, 2013 9:06 by Reuters
Dubai and Abu Dhabi plan to merge their state aluminium producers in a $15 billion deal that suggests the two emirates are willing to consolidate business interests to better compete in the global economy.
Combining Dubai Aluminium (Dubal) and Emirates Aluminium (Emal) to create the world’s fifth-largest aluminium producer goes against the grain for the two wealthy Gulf emirates, which for decades have built competing interests in sectors ranging from stock markets to ports and airlines.
Emirates Global Aluminium will be the first product of a merger between companies controlled by the two emirates and will be better able to compete with state-owned Aluminium Bahrain , owner of the world’s fourth-largest aluminium smelter.
“This deal could be giving hints of more consolidation at the government level and creating strong UAE players on the global stage,” said Mohamed Ali Yasin, managing director of National Bank of Abu Dhabi’s brokerage division.
“It also in a way shapes the policy … for the next direction of economic growth of the UAE,” he said.
Governments across the Gulf Arab region are trying to reduce their dependence on oil by diversifying into sectors such as aluminium and petrochemicals.
Dubai’s shift has been the most radical, its dash into new industries born of necessity as its oil and gas reserves decline. Abu Dhabi, with far greater reserves of hydrocarbons, has taken a more gradual approach.
Abu Dhabi’s abundant energy reserves will help the combined company keep a lid on the high energy costs involved in aluminium smelting.
The deal has been in the works for years.
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