Abu Dhabi sovereign wealth fund Mubadala Investment Co. is considering plans to sell at least part of its stake in telecom operator Du for $1 billion, according to people familiar with the matter, reported by Bloomberg. Companies including Emirates NBD, First Abu Dhabi Bank and Goldman Sachs Group Inc. have lined up to advise on the deal, the people said, speaking on condition of anonymity because the information is confidential.
Mamoura Diversified Global Holding
Mubadala has been considering a sale for some time, but talks are still in the early stages, the people said. No final decisions have been made on the size or timing of the sale. Representatives for Mubadala, Du and the banks declined to comment. Mubadala currently owns about 10% of Du through a unit called Mamoura Diversified Global Holding. The fund last reduced its stake in the company in 2019, selling a 10% stake, then valued at around $630 million, to the UAE’s sovereign wealth fund, the Emirates Investment Authority.
EIA is Du’s largest shareholder with a stake of just over 50%. The Mubadala sale will add further impetus to a small but growing market for follow-on equity offerings in the Middle East. Such deals are becoming increasingly common in the Gulf, following a four-year wave of initial public offerings. For regional governments seeking to finance their economic transformation plans, the move broadens the options for portfolio companies beyond IPOs. Higher free float levels also increase the firms’ chances of inclusion in broader indices such as MSCI and help to boost liquidity in domestic capital markets.
Adnoc Drilling
Abu Dhabi National Oil Company raised $2.8 billion by selling a stake in its gas unit in February and $900 million by selling Adnoc Drilling Co. last year. The Saudi government raised about $12 billion by buying back part of its stake in Aramco last year, while the kingdom’s fund sold a $1 billion stake in a telecommunications company. Du was part of a previous wave of IPOs in the UAE and raised 2.4 billion dirhams ($650 million) in 2006 from a listing in Dubai. In February, the company announced its highest ever dividend after reporting strong results for 2024.