Abu Dhabi to the rescue.

The Daimler stake is not likely to be the only distressed asset the emirate snaps up

Aabar InvestmentsAE purchase of a $2.7 billion stake in German car-maker Daimler, owner of Mercedes-Benz, probably wonAEt be its last overseas acquisition as Abu Dhabi takes advantage of depressed asset prices to diversify its economy, according to Bloomberg newswire. oYou are going to see many Abu Dhabi sovereign entities make acquisitions,o Bobby Sarkar, an analyst at Al Mal Capital, said. Aabar, a state-controlled investment company, has agreed to buy 9.1 per cent of Daimler, making it the largest shareholder in the worldAEs second-biggest luxury carmaker.a Meanwhile, Abu DhabiAEs government-backed investment vehicles as a whole have announced plans to expand their holdings by at least $12 billion over the next five years. Firms such as International Petroleum Investment Company, AabarAEs state-owned parent, and energy investor Abu Dhabi National Energy Company (or Taqa) are focused oon acquisitions and take advantage of depressed asset priceso, Sarkar said. Abu Dhabi plans to expand its real estate, tourism and manufacturing industries as it seeks to reduce its dependency on oil and gas to around one-third of gross domestic product by 2030, from around 60 per cent today. Part of this diversification comes from using these oil revenues through government-owned investment companies to buy up stakes in other sectors. Taqa said yesterday it had completed the purchase of a 50 per cent stake in Marubeni CorporationAEs Caribbean power and transmission facilities for $320 million. Taqa plans to spend as much as $4 billion on acquisitions this year to become a global energy producer, chief executive officer Peter Barker-Homek said earlier this month. Also this month, IPIC won approval from European Union regulators to buy a 70 per cent stake in Munich-based MANAEs Ferrostaal industrial-services units for $490 million. IPIC, whose international investments are valued at $12 to $15 billion, aims to boost its holdings to $20 billion in the next five years, CEO Khadem al-Qubaisi said in January. AabarAEs Daimler purchase ois a further move to diversify from its dependence on oil for revenue and increase its manufacturing knowledge and productiono, said Matthew Wakeman, managing director of cash and equity brokerage at Egyptian investment bank EFG-Hermes. oA premium brand such as this opens the doors for cooperation and regional expansion in the future,o he said. Aabar, once an owner of oil exploration assets, sold its energy business to Abu Dhabi government-owned Mubadala Development Company in May to become a diversified investment company. Daimler and Aabar said yesterday they intend to cooperate on the development of electric vehicles and new materials for car making. Aabar will hold its stake in Daimler for a olong timeo since it is omore of a partnershipo, Mohamed Badaway Al-Husseiny, AabarAEs chief financial officer, said. oWe see Mercedes as an iconic brand.o Including the Daimler investment, Abu Dhabi state-owned entities have invested more than $5 billion abroad in the past 18 months. Aabar agreed to buy AIGAEs private bank for $272 million in December and IPIC has spent more than $2.5 billion on stakes in companies such as Nova Chemicals Corporation, CanadaAEs biggest chemical maker; EDP-Energias de Portugal, PortugalAEs largest electricity company; Ferrostaal, a German oil services company, and Austrian oil producer OMV.

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