Wednesday, July 23, 2008

GE teams with Mubadala on $8B investment venture

By Mass High Tech Staff

Fairfield Conn.-based General Electric Co. has entered into a joint venture with Abu Dhabi-based investment firm Mubadala Development Research in a deal valued at $8 billion and aimed at providing commercial finance in the Middle East and Africa.

The deal has each firm putting up $4 billion, with Mubadala gradually buying GE (NYSE: GE) stock on the open market to eventually become a top 10 shareholder in the company, according to officials.

Industries the tandem intends to target include clean energy and water, aviation, and oil and gas sectors, according to company officials. Over the next 18 months the companies plan to invest about $40 billion in commercial and infrastructure projects across the region, GE’s fastest-growing market.

The move reflects GE’s strategy of shifting its financial operations away from volatile segments such as those influenced by U.S. consumer spending toward areas that provide higher growth.

Part of the joint venture will include investment in clean energy technologies and Masdar City, a new $22 billion city in Abu Dhabi that aims to be carbon neutral. GE plans to commit up to $50 million for Masdar’s second clean-tech fund, according to officials.

The fund currently stands at approximately $250 million, with investors including Credit Suisse, Siemens Venture Capital and Consensus Business Group. Portfolio companies include Texas-based solar technology company HelioVolt Corp., Georgia-based renewable fuel developer EnerTech Environmental Inc. and Bedford, N.H.-based Segway Inc.

Masdar City has also struck a partnership with MIT and established the Masdar Institute of Science and Technology (MIST), Masdar’s intellectual center.