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Abu Dhabi Invests in Citigroup

The oil rich government of Abu Dhabi has decided to help save Citigroup from its credit woes. The IHT reports that the Abu Dhabi Investment Authority is purchasing a $7.5 billion stake in Citigroup.
By agreeing to purchasing a $7.5 billion stake in the faltering banking giant Citigroup, the secretive, government-controlled Abu Dhabi Investment Authority is breaking with tradition.

As the largest sovereign wealth fund in the world, with assets estimated at $650 billion, it poured money in the past into low-return, low-profile investments or small emerging market deals, unlike its flashy emirate neighbor, Dubai.

But a falling dollar and a growing cash pile are spurring Abu Dhabi to change strategy, according to analysts, economists and deal makers, who said that more big-ticket deals might be ahead.

Flush with cash from its oil exports, Abu Dhabi turned to Wall Street, using a complicated transaction late Monday to buy 4.9 percent of Citigroup, acquiring high-yield, convertible stock that must be exchanged for common stock between March 2010 and September 2011.
Abu Dhabi will obtain a 4.9 percent stake in Citigroup with the investment. The move comes just after Citigroup's shares hit a five-year low.

Tags: finance | abu-dhabi

Posted on 2007-11-28
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