UPDATE 1-Abu Dhabi to merge sovereign investment funds Mubadala and IPIC

Abu Dhabi plans to merge state investment funds Mubadala Development Company and International Petroleum Investment Company

  
A general view shows the beach road in the UAE capital Abu Dhabi

A general view shows the beach road in the UAE capital Abu Dhabi

Reuters/STR New
* Mubadala, IPIC to merge on order of govt - statement

* To create fund with $135 bln of assets - Reuters calculations

(Adds detail, context)

DUBAI, June 29 (Reuters) - Abu Dhabi plans to merge state investment funds Mubadala Development Company and International Petroleum Investment Company , the emirate's state news agency said on Wednesday.

The combined fund would have assets worth around $135 billion, according to Reuters calculations based on both funds' latest financial statements.

"The merger of the two companies augments the investment advantages and economic revenue for Abu Dhabi, and creates a body capable of achieving the highest level of integration and growth in multiple sectors, including energy, technology and space industry," the agency said.

A committee headed by Deputy Prime Minister Sheikh Mansour bin Zayed al-Nahayan will oversee the merger, the statement added, without giving a timeframe for when the combination would be completed.

The merger comes as Gulf sovereign investment funds are adjusting to lower oil prices. Mubadala did not receive any new cash from the government in 2015 for the first time in at least eight years.

IPIC is also in the midst of a row with 1MDB. The Abu Dhabi fund has asked a London court to arbitrate in a dispute with the Malaysian state fund over a debt restructuring in which IPIC is claiming about $6.5 billion.

Mubadala's role had been to make investments which would help advance Abu Dhabi and its economy. As well as controlling companies such as clean energy firm Masdar and satellite operator Yahsat, it has stakes in General Electric and Carlyle Group .

IPIC was tasked with making investments in the energy sector. It owns Spanish energy firm Cepsa, Canadian petrochemical maker NOVA Chemicals and has a majority stake in Austrian plastics company Borealis.

A spokesman for IPIC declined to give further comment. A spokesman for Mubadala did not immediately respond to a request for details.

(Reporting by Ahmed Tolba, Writing by David French; Editing by Sami Aboudi and Louise Heavens) ((davidj.french@thomsonreuters.com; +971 4 362 5864; Reuters Messaging: davidj.french.thomsonreuters.com@reuters.net))


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