Abu Dhabi's Aabar buys UniCredit stake worth $2.5 billion

DUBAI/MILAN Thu Jun 24, 2010 8:02am EDT

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DUBAI/MILAN (Reuters) - Abu Dhabi's Aabar AABAR.AD took advantage of the weaker euro to buy a 4.99 percent stake in UniCredit (CRDI.MI) worth $2.48 billion, becoming the Italian bank's second biggest shareholder, the chief executive of the sovereign wealth fund said.

"We have always had a strategy to invest in financial services," said Mohamed Badawy Al-Husseiny, Aabar's chief executive told Reuters on Thursday.

"With the decline in the euro, wherever we see good opportunities that fit our profile, we will pursue this."

Aabar's stake, purchased on June 16, is worth about 1.85 billion euros ($2.48 billion) at current market prices.

The investment firm, also the largest shareholder in Daimler (DAIGn.DE), has about $10 billion in assets. It first invested in UniCredit, the biggest lender in central and eastern Europe, in the bank's 2008 capital increase through convertible bonds.

With the current deal, Aabar becomes UniCredit's second-biggest shareholder, according to its website, behind Italian investment bank Mediobanca (MDBI.MI), which has 5.143 percent.

The Central Bank of Libya holds 4.988 percent in UniCredit.

Core Italian foundation shareholders, which individually have less than 4.988 percent stakes, together hold over 10 percent of the bank.

Aabar, majority-owned by the government of Abu Dhabi, surprised investors on Monday when it announced it was considering delisting from the Abu-Dhabi bourse and converting to a private joint stock company.

"Maybe with the drop in the euro this has presented companies like Aabar with a good catch," said Mohamed Yasin, managing director of Shuaa Securities in Dubai. "They have a good track record of making successful investment so maybe they will make a good return on this in the medium term."

UniCredit shares were down 0.5 percent at 1.90 euros by 1159 GMT. The Stoxx Europe 600 Banks index .SX7P was down 1.6 percent. Aabar's shares closed down 3.4 percent in Abu Dhabi bourse.

If shareholders approve the delisting plan on Thursday at Aabar's board meeting, the firm is expected to move from being one of the most transparent sovereign funds, most of whom operate in complete secrecy, back into the shadows and become the first delisting of a local firm from the Abu Dhabi bourse.

The company did not give a reason for the plan.

The Abu Dhabi government investment vehicle International Petroleum Investment Corporation (IPIC) holds a majority stake in Aabar, one of the most active investment funds in the region.

The firm hit the headlines last year by picking up a 9.1 percent stake in Daimler for about $2.7 billion and a 32 percent stake worth $280 million in Virgin Group's space travel unit Galactic.

(Writing by Dinesh Nair, Tamara Walid; Editing by Mike Nesbit and Elaine Hardcastle)

($1=.7453 euros)

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