Abu Dhabi National Energy Company, better known as Taqa, has entered into definitive agreement to acquire Sustainable Water Solutions Holding Company (SWS Holding) for Dh1.7 billion ($463 million).
The deal increases Taqa's regulated asset base by more than 20 per cent, with the company's expansion into the wastewater network and treatment business expected to boost its position as Abu Dhabi’s fully integrated utility, while also strengthening its ability to support the UAE’s net-zero ambitions.
SWS Holding was founded this year with the aim of delivering sustainable water solutions.
The company took ownership of Abu Dhabi Sustainable Water Solutions Company (ADSWS), formerly known as Abu Dhabi Sewerage Services Company, the main entity behind all wastewater collection, treatment and reuse in Abu Dhabi.
Under the terms of the agreement, Taqa will acquire all outstanding shares of SWS Holding for Dh1.7 billion, with 50 per cent of the consideration to be paid upon completion and the remaining 50 per cent to be paid a year after completion, Taqa said on Wednesday in a regulatory filing to the Abu Dhabi Securities Exchange, where its shares are traded.
Taqa will make an additional payment in 2024 linked to net profit generated during 2023. The transaction is expected to be completed this year, subject to regulatory and relevant third-party approvals.
“The strategic acquisition of SWS Holding is an important step in Taqa’s accelerated delivery of its growth agenda,” said Jasim Thabet, chief executive and managing director of Taqa Group.
“Two years ago, we set out our growth ambitions in a 2030 strategy … this transaction is a logical extension of our regulated asset base into wastewater networks and treatment, which, in Abu Dhabi, is subject to the same structure of regulation and the same principles as our existing power and water transmission and distribution business.
“The new business will provide a substantial boost to our regulated asset base and associated stable long-term earnings.
“The efficient management of water will play a key role in enabling the UAE to reduce greenhouse gas emissions.
“By bringing the management of recycled water, together with Taqa’s water desalination activity and our recycled water network, we can do even more to support the net-zero target by 2050.”
Taqa reported an almost sixfold jump in its first-quarter profit this year, boosted by its purchase of a 5 per cent stake in Adnoc Gas.
Net income attributable to shareholders for the three months to the end of March jumped to Dh11.57 billion, compared with the same period a year earlier, while revenue grew by about 6 per cent in the first quarter to Dh13.14 billion, supported by higher bulk supply tariffs and transmission charges.
SWS Holding will add about Dh16 billion to Taqa’s existing regulated asset value of about Dh75 billion, boosting its cash flow and long-term earnings, the company said.
The transaction is expected to generate significant synergies which will create value for Taqa and its shareholders.
Taqa is 90.03 per cent owned by the Abu Dhabi Power Corporation while Multiply Group holds a 7.3 per cent stake.
ADSWS will operate under and benefit from the same regulatory controls set by the Abu Dhabi Department of Energy that govern Taqa’s existing UAE transmission and distribution businesses.
ADSWS has a network of sewer pipelines that extend for more than 12,000km and a sewage treatment capacity of about 1.3 million cubic metres per day from its 37 wholly owned treatment plants and through a 60 per cent ownership in two companies owning four sewage treatment plants in Abu Dhabi under the build, own, operate and transfer model.
“The prospect of becoming part of Taqa as a national champion with great sustainability aspirations is compelling and will allow us to leverage our combined strengths, fostering increased collaboration and delivering improved services in sustainable water management,” said Ahmed Al Shamsi, SWS Holding’s chief executive and managing director.
Who was Alfred Nobel?
The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.
- In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
- Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
- Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
Match info:
Burnley 0
Manchester United 2
Lukaku (22', 44')
Red card: Marcus Rashford (Man United)
Man of the match: Romelu Lukaku (Manchester United)
Super Bowl LIII schedule
What Super Bowl LIII
Who is playing New England Patriots v Los Angeles Rams
Where Mercedes-Benz Stadium in Atlanta, United States
When Sunday (start time is 3.30am on Monday UAE time)
Frankenstein in Baghdad
Ahmed Saadawi
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UAE currency: the story behind the money in your pockets
Results
6.30pm: Dubai Millennium Stakes Group Three US$200,000 (Turf) 2,000m; Winner: Ghaiyyath, William Buick (jockey), Charlie Appleby (trainer).
7.05pm: Handicap $135,000 (T) 1,600m; Winner: Cliffs Of Capri, Tadhg O’Shea, Jamie Osborne.
7.40pm: UAE Oaks Group Three $250,000 (Dirt) 1,900m; Winner: Down On Da Bayou, Mickael Barzalona, Salem bin Ghadayer.
8.15pm: Zabeel Mile Group Two $250,000 (T) 1,600m; Winner: Zakouski, James Doyle, Charlie Appleby.
8.50pm: Meydan Sprint Group Two $250,000 (T) 1,000m; Winner: Waady, Jim Crowley, Doug Watson.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
