Ferrostaal has new Abu Dhabi ties

The next investor in Ferrostaal, the German company charged with bribery that an Abu Dhabi sovereign wealth fund has just offloaded, also hails from the emirate.

Commodore Contracting has agreed to acquire a 25 per cent stake in Ferrostaal's new owner, MPC Industries.

An Abu Dhabi company has acquired a stake in the owner of Ferrostaal, a German engineering company, after one of the emirate's wealth funds divested from the company in controversial circumstances.

International Petroleum Investment Company (Ipic), which is owned by the Abu Dhabi Government, sold its stake in Ferrostaal after the German company agreed to pay fines for alleged bribery that took place before Ipic's involvement.

Commodore Contracting, a privately owned construction company, has agreed to acquire a 25 per cent stake in Ferrostaal's new owner, MPC Industries, which took control of the engineering group on November 28.

A spokesman for MPC said the deal with Commodore was concluded the day before Ipic announced a €350 million (Dh1.7 billion) sale of its majority stake in Ferrostaal.

Commodore, which is majority-owned by Sheikh Tahnoon bin Saeed bin Shakhboot Al Nahyan, has satellite offices in Morocco, Lebanon, Qatar, Iran and Germany. Among its projects are several of Abu Dhabi's royal palaces and Ipic's waterfall-shaped headquarters under construction in the capital.

Ipic and executives from Commodore did not respond to requests for comment.

Abu Dhabi's involvement with Ferrostaal began in 2009, when Ipic spent US$700m (Dh2.5bn) to buy a 70 per cent stake of the company from MAN, a German lorry maker.

After the sale, Ferrostaal executives were implicated in bribery investigations in Germany and Greece dating from before the Ipic acquisition.

The investigations ignited a dispute between Ipic and MAN, with the latter trying to force Ipic to buy out the rest of Ferrostaal through a provision in its acquisition contract.

Last week, Ipic announced it had untangled itself from Ferrostaal by selling the stake back to MAN for €350m. MAN, in turn, agreed to sell Ferrostaal to MPC for €150m, according to Ulrich Bieger, a spokesman for MPC, which is part of Munchmeyer Petersen and Co, a family-owned conglomerate based in Hamburg.

Negotiations for Commodore to buy a quarter of MPC began earlier this year, the German company said.

"The interesting thing for MPC is to get the possibility of opening the market of the Emirates," Mr Bieger said.

MPC did not say how much Commodore would pay for its stake.

The value of Ferrostaal has fallen since Ipic's acquisition two years ago, said Martin Kohlhase, a corporate analyst at Moody's Investors Service.

"Given the lowering of the nominal purchase price, one would assume that the price has been lowered largely because of the reputational damage because of the allegations which emerged," he said.

This is the third major mergers and acquisitions deal involving Ipic this year.

In February, the strategic investment company paid €4bn to take a controlling stake in Cepsa, a Spanish oil company, before Aabar Investments, an Ipic subsidiary, bought a 25 per cent stake in a Malaysian lender, RHB Capital Berhad in June.