Abu Dhabi’s Gulf Capital, Waha Capital have held early merger talks

Abu Dhabi investment firms Gulf Capital and Waha Capital have held exploratory discussions regarding a merger, three sources familiar with the matter told Reuters.

The talks have taken place over the last few months and may or may not lead to a deal, the sources said.

Private equity firm Gulf Capital manages over $4bn in assets. Waha Capital’s total assets stood at $3.18bn at the end of last year. It also managed funds worth around $700m.

Waha Capital’s portfolio of investments includes stakes in aviation leasing firm AerCap Holdings, a major Middle East and North African oil and gas services provider and industrial real estate.

Abu Dhabi’s state fund Mubadala has a minority stake in Waha Capital and Abu Dhabi Investment Council (ADIC), a unit of Mubadala, is a shareholder in Gulf Capital.

Lower oil prices and government spending have spurred mergers and acquisitions in Abu Dhabi, the capital of the United Arab Emirates.

Waha Capital and Mubadala Investment Company declined to comment. Gulf Capital did not respond to an email seeking comment.

Shareholders of Gulf Capital were pushing for a possible merger with Waha, said the sources, declining to be named due to commercial sensitivities.

Gulf Capital has been under pressure from ADIC and from Abu Dhabi Commercial Bank (ADCB), which also has a stake in Gulf Capital and a board seat, to seal deals, the sources said. ADCB declined to comment.

There are some other shareholders who also want a merger, they said.

One of the sources said there could be some clarity about the merger plans by June.

However, the prospects for a deal are unclear following the appointment in March of Waleed Ahmed Al Mokarrab Al Muhairi as chairman of Waha.

Al Muhairi, an experienced executive who is also deputy group chief executive at Mubadala, is drawing up a strategy for Waha, one of the sources said.

It is unclear whether a merger might be part of that strategy, which should be presented to the board shortly, the source said.