UAE Merges State Firms To Create Major Defence Company

The United Arab Emirates (UAE) announced on Tuesday the merger of a number of state-controlled defence companies to create an integrated services and manufacturing business called Emirates Defence Industries Company (EDIC).

The new entity will bring together 11 companies from the subsidiaries of state-owned investment firms Mubadala Development Company, Tawazun Holding and Emirates Advanced Investment Group in a first phase of integration.

The chief executive of the merged entity is to be Luc Vigneron, former CEO of Thales, Europe’s largest defence electronics firm, state news agency WAM reported.

Several more industrial services subsidiaries of Mubadala and Tawazun are being considered for integration during a second phase, which will begin early in 2015, WAM said.

“The outcome … will be an integrated defence platform benefiting from improved alignment, performance and increased capacity, which is better positioned to serve the UAE Armed Forces and compete for business in the region,” the agency quoted EDIC chairman Homaid Al Shemmari as saying.

Abu Dhabi’s development of defence industries is part of efforts by the UAE’s main petroleum exporting emirate to boost the non-oil economy. The OPEC member has invested billions of dollars in aerospace, tourism, infrastructure and real estate.

Emirates Advanced Invest Group is mainly involved in weapons system maintenance and aircraft maintenance. Tawazun’s companies make firearms and also components for the aerospace and defence industries.

The activities of Mubadala’s companies operating in defence and aerospace include making airliner spare parts, building naval vessels and maintaining and repairing advanced aircraft.

The announcement comes ahead of the bi-annual International Defence Exhibition (IDEX), the region’s largest military show, due to be held in February 2015 in Abu Dhabi, the UAE capital.