Abu Dhabi-listed Alpha Dhabi Holding is to sell a 49 per cent stake in its construction subsidiary to investment conglomerate ADQ as the UAE capital focuses on growing its infrastructure as it diversifies its economy.
The move aims to combine “the expertise and capabilities” of Alpha Dhabi Construction Holding and ADQ, Alpha Dhabi said in a statement on Tuesday to the Abu Dhabi Securities Exchange, where its shares are traded.
The size of the transaction, subject to regulatory approvals, was not disclosed.
Alpha Dhabi will retain the 51 per cent stake in ADCH, which, along with its subsidiary Trojan Construction, has worked on projects such as the Zayed National Museum and the Guggenheim Museum, and critical infrastructure such as the national railway network.
It has also worked on large-scale residential community projects for local real estate developers, including Aldar, Modon Properties and Emaar.
The collaboration “allows us to deepen our commitment to national development, enabling us to tackle complex, large-scale projects with a keen focus on safety, quality, and timely delivery”, said Hamad Al Ameri, chief executive and managing director of Alpha Dhabi and chairman of ADCH.
Alpha Dhabi, set up in 2013, has more than 250 businesses across health care, renewable energy, petrochemicals, real estate, construction and hospitality, and employs more than 90,000 people.
It reported a 45.4 per cent surge in its full-year profit for 2023 to Dh10.6 billion ($2.89 billion), as revenue rose 14 per cent annually to Dh45.4 billion.
The company's portfolio in property and construction contributed 23 per cent and 19 per cent, respectively, to the total revenue.
In 2022, the company also increased its stake in Aldar Properties to become the parent company of the property developer.
The property and construction market in the UAE is growing, amid plans to support economic diversification as well as infrastructure spending to grow foreign direct investment.
The country's construction market is estimated to reach more than $50.4 billion by 2029 from $41 billion in 2024, according to a report by Mordor Intelligence.
In Abu Dhabi, the construction industry grew by 14.3 per cent and contributed Dh25 billion to the emirate’s economy in the third quarter of 2023, according to official data from the Statistics Centre Abu Dhabi.
ADQ, which has 25 companies under its umbrella spanning sectors including energy, utilities, food and agriculture, health care, pharmaceuticals, mobility and logistics, is also expanding its portfolio locally and internationally.
The annual profit of companies within the group's portfolio has been growing 20 per cent every year between 2019 and 2022, contributing 22 per cent to Abu Dhabi’s non-oil gross domestic product, Jaap Kalkman, group chief investment officer at ADQ, said in November.
Some of the companies in its portfolio include Abu Dhabi National Energy Company, better known as Taqa, the Emirates Nuclear Energy Corporation, Abu Dhabi Airports, Abu Dhabi Ports Group, Etihad Rail and Abu Dhabi National Exhibitions Company.
“With a long-standing focus on investing in infrastructure assets in line with our mandate, we welcome the opportunity to invest in ADCH as it enters the next phase of its … journey in spearheading the development of landmarks and coveted real estate developments in the UAE,” said Hamad Al Hammadi, deputy chief executive of ADQ.
