* Arabtec to own 60 pct of new firm, Samsung rest
* New company to be named Arabtec-Samsung Engineering
* Co to bid for regional contracts worth $3-$10 bln
(Adds details, background)
DUBAI, April 17 Arabtec, the
contractor part-owned by Abu Dhabi state fund Aabar, agreed with
Korea's Samsung Engineering Co to jointly form a new
company that will focus on large energy and power-related
projects in the region.
The Dubai-based builder, which is planning a $1.8 billion
capital increase as part of its expansion drive, said the new
firm would be 60 percent owned by Arabtec and headquartered in
the oil-rich United Arab Emirates capital of Abu Dhabi.
Samsung Engineering would own the remaining 40 percent, the
two companies said in a joint bourse statement on Wednesday.
The partnership builds on the growing political and economic
ties between Abu Dhabi and South Korea, with Korean companies
also leading the construction of the UAE's first nuclear power
plant, a project worth around $20 billion.
Under the terms of the agreement, Arabtec-Samsung
Engineering will bid for projects in oil and gas, power and
infrastructure sectors in the Middle East and North Africa, for
contracts ranging between $3-$10 billion, the statement said.
Samsung has been aggressively growing in the region and has,
along with a consortium of contractors, won several
billion-dollar contracts in countries such as Saudi Arabia,
Iraq, the UAE and other regional nations.
"Samsung Engineering is currently executing major projects
in the UAE worth $9 billion," said Park Ki-Seok, Samsung
Engineering's president and chief executive. It has a backlog of
$10 billion in oil and gas, power and infrastructure in the MENA
Meanwhile, Arabtec will use the deal to push ahead with its
ambition to grow in the oil & gas construction sector.
Arabtec is also set to acquire the remaining 40 percent it
does not already own in UAE oil and gas construction firm Target
Engineering, according to sources familiar with the plan.
Arabtec replaced its chief executive in February as part of
the shake-up led by Aabar, which has been tightening its grip on
The group's chief executive has said that the company will
look to growth through a series of acquisitions and joint
"We are currently considering further joint ventures, with
world class companies to progress other areas of Arabtec's
growth strategy," Khadem al-Qubaisi, the chairman of Arabtec
said in the statement.
(Reporting by Praveen Menon; Editing by Dinesh Nair and Elaine