DUBAI, United Arab Emirates (AP) - A top United Arab Emirates official ordered the merger of two prominent government wealth funds on Wednesday, streamlining the country's investment strategy as it weathers a slump in oil prices.
The decision by Abu Dhabi's crown prince, Sheikh Mohammed bin Zayed Al Nahyan, will combine Mubadala Development Company and the International Petroleum Investment Company into a new entity that will hold roughly $135 billion in assets across businesses ranging from computer chips to renewable energy.
Both companies are owned by Abu Dhabi, the oil-rich capital of the seven-state Emirates federation, which includes the Gulf commercial hub of Dubai.
State news agency WAM said the tie-up would "create greater benefits and enhanced economic value" for the Abu Dhabi government.
The drop in oil prices over the past two years has led to a widening deficit and a slowdown in the UAE economy, and has prompted the government to cut back on generous energy subsidies. Abu Dhabi controls the bulk of the OPEC member's 98 billion barrels of oil reserves, the world's seventh largest.
Mubadala's holdings include semiconductor maker Globalfoundries and renewable energy company Masdar, as well as stakes in Fairfield, Connecticut-based General Electric Co. and Washington-based private equity firm The Carlyle Group.
IPIC holds stakes in several energy-related companies and owns most of Abu Dhabi-based Aabar Investments, whose holdings include partial ownership of space tourism startup Virgin Gallactic.
The Abu Dhabi companies' most recent financial statements show that Mubadala holds about $67 billion in assets and IPIC $68 billion. They together carry about $42 billion in debt.
The merger plans come 10 days after Abu Dhabi's First Gulf Bank and the National Bank of Abu Dhabi said they have begun talking about a possible tie-up.
___
Follow Adam Schreck on Twitter at www.twitter.com/adamschreck .