Mubadala Investment Company, Abu Dhabi’s strategic investment arm, has acquired 1.9 per cent stake in petrochemicals company Sibur for an undisclosed amount, marking the fund’s largest investment in Russia.
The deal takes forward the relationship between the two, which was forged after Mubadala invested in Sibur’s trans-shipment terminal in Ust-Luga in 2015.
“Mubadala and Sibur have had a partnership since 2015 and now we are excited to become shareholders in the company," Faris Al Mazrui, head of Mubadala’s Russia and CIS Investment Programme, said in a statement on Wednesday. "We have a lot of confidence in Sibur’s ability to navigate and transition the company to a low-carbon economy and create lasting value for its investors.”
Mubadala picked Sibur for its past performance in delivering complex large-scale projects, he said.
“Sibur’s [recent] merger with [Russian petrochemical major] TAIF creates an even better-positioned player in the market that can capitalise on synergies and development opportunities,” Mr Al Mazrui said.
However, the terms of the acquisition were agreed before Sibur’s merger with TAIF, Mubadala said. It will further “enhance the company’s position in the polyolefins and rubbers markets, contribute to the pipeline of growth capex projects and unlock additional operational synergies”, it added.
Since entering the Russian market in 2010, the Abu Dhabi sovereign fund has made investments in a number of businesses to the tune of more than $3 billion.
It built a portfolio of about 50 investments across sectors, ranging from infrastructure and property to commodities, banking, logistics and technology, resulting in strong financial returns.
In June, Mubadala acquired 2.6 per cent stake in Russian aluminium company En+, which is listed on the Moscow Stock Exchange with global depositary receipts also listed on the London Stock Exchange.
Mubadala has also partnered with the Russian Direct Investment Fund to form a $7bn co-investment platform.
Last month, the UAE's Ministry of Industry and Advanced Technology signed an agreement with Russia's Ministry of Industry and Trade to collaborate in hydrogen fuel technology. The agreement came as major oil producers such as the UAE, Saudi Arabia and Russia revealed their targets of net-zero emissions by the middle of the century.
Mubadala’s $243.4bn investment portfolio spans five continents, with interests in aerospace, information and communications technology, semiconductors, metals and mining, renewable energy, oil and gas, and petrochemicals.
Meanwhile, privately owned Sibur is transitioning to an environmental, social and governance-driven strategy and governance framework, which is expected to enable Eastern Europe’s largest petrochemicals producer to develop into one of the most sustainable industry market participants, according to the statement.