GE Follows the Money to Abu Dhabi

Posted by: Stanley Reed on July 22

With much of the world economy slowing, everyone wants a piece of the still sizzling Middle East. GE is no exception. CEO Jeff Immelt is a regular visitor to the Gulf, where GE’s business has seen red hot growth in recent years. Now he has cut a deal with Mubadala Development Co., a trophy hunting wing of the Abu Dhabi government to deepen GE’s presence in the oil lands. In a region awash in cash, Abu Dhabi, a major oil producer, is probably king of the money mountain with several hundred billion dollars worth of investments.

Mubadala is run by Khaldoon al Mubarak, perhaps the most effective of the bright young men around Crown Prince Mohammed, the Emirate’s chief mover and shaker. Set up to wheel and deal in contrast with the staid Abu Dhabi Investment Authority, Mubadala has already taken stakes in an eclectic group of companies including Ferrari, Advanced Micro Devices, and Carlyle Group. Mubadala deals are supposed to benefit the Abu Dhabi economy, which is heavily dependent on oil for cash and government for jobs.

At first glance the tieup with GE looks like a win for the emirate’s strategy of using its big bucks to attract high-end jobs to Abu Dhabi—even if the skills short emirate does not seem like the most logical choice for them. The two companies have pledged to put $4 billion each into a commercial financial services joint venture, headquartered, where else, in Abu Dhabi. It will seek investment opportunities, particularly in the Middle East and Africa.

GE and Mubadala will also establish a clean energy research center with up to 100 researchers at Abu Dhabi’s Masdar City, the new carbon neutral city the emirate is building in the desert. G.E. will invest $50 million in the second clean-tech fund of Masdar, the Mubadala offshoot that is spearheading the alternative energy drive. In addition, GE will look into expanding its existing aircraft engine overhaul operation with Mubadala’s Abu Dhabi Aircraft Technologies.