Sovereign funds are attracted to the European aerospace and defence industries because of the prospects of solid returns. Michael Buholzer / Reuters
Sovereign funds are attracted to the European aerospace and defence industries because of the prospects of solid returns. Michael Buholzer / Reuters

EU need not take cover over foreign investment

A small number of sovereign investors, sometimes from non-democratic states, are buying shares in European aerospace and defence companies.

Some EU governments have responded by calling for tougher controls on foreign investment in these industries. But there is no need for alarm. The European defence sector is sufficiently protected by the heavy - and at times excessive - regulations in place.

In the long term, if EU member states integrate their defence industries further they should co-ordinate their efforts to regulate foreign investments in this sector, including those by sovereign investors.

Sovereign wealth funds (SWFs) and state-owned enterprises (SOEs) with ties to governments from the Gulf, the former Soviet Union and emerging Asia have become increasingly powerful global investors. SWFs alone are estimated to manage close to US$4 trillion (Dh14.69tn) of assets globally.

Sovereign groups have focused their investments in Europe predominantly in the financial sector and remain limited players within the aerospace and defence industry. But some sovereign investors have held small stakes in the industry for years, including the Government of Singapore Investment Corporation.

More recently, the number of sovereign groups interested in European aerospace and defence companies has grown.

Attracted by the prospect of solid financial returns and access to advanced technology, various SWFs and SOEs acquire small European aerospace firms, invest in some of Europe's largest groups and set up a multitude of joint ventures.

In 2006, the sovereign fund Dubai International Capital (DIC) bought Doncasters, a British company that supplies aircraft parts among other things.

The same year, Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, bought about 30 per cent of Piaggio Aero, an Italian civil aircraft maker. And a consortium of SWFs from Dubai and Abu Dhabi took over the German firm SR Technics Group, a leading independent aircraft maintenance provider.

In 2007, DIC became one of the largest direct shareholders in Europe's biggest aerospace company, EADS - the European Aeronautic Defence and Space Company - when it bought just over 3 per cent.

That same year, the Qatar Investment Authority (QIA) expressed a desire to acquire a 10 per cent stake of the company. DIC and QIA have also been significant investors in EADS's largest shareholders, Lagardere and Daimler.

In 2006, Russia's VTB Bank bought more than 5 per cent of EADS and people close to the Kremlin publicly expressed an interest in doubling that share. And in the summer of last year, rumours abounded that a Libyan SWF was interested in buying up to 10 per cent of the Italian defence conglomerate Finmeccanica.

The various joint ventures sovereign groups have developed with large European aerospace and defence manufacturers have been created mainly within the civilian field. Mubadala has partnerships with EADS, Finmeccanica and Rolls-Royce.

The Russian defence firm IRKUT has joint ventures with EADS and Rolls-Royce, while several Russian groups, including Oboronprom Corporation, co-operate with Finmeccanica in building helicopters, jets and components for the railway sector.

The Italian company also has various partnerships with government-owned groups in Libya.

SWFs can be useful sources of capital for defence companies, especially now fiscal pressure is forcing governments across Europe to cut defence budgets.

But sovereign investors, like other investors, could leak information about sensitive military equipment produced by a defence company.

SWFs could also threaten the security of supply for a nation's armed forces.

A sovereign investor controlling a defence manufacturer could stop the company from producing some military equipment for commercial or political considerations.

After the controversial investment by the Russian bank in EADS in 2006, such concerns led to calls in Berlin for stronger protection against foreign investors. The German government even considered introducing golden shares - able to outvote all others - in the European aerospace group.

Sovereign groups have focused their European investments in the financial sector and are limited players in aerospace and defence industries.

But for the moment, European governments do not need additional legal safeguards to protect their defence industries against sovereign investors.

The specific mechanisms in place vary across EU member states but all European countries with large defence industries can already prevent investments considered detrimental to their national security - be it through golden shares, ceilings on foreign shareholdings or ministerial committees that oversee foreign bids, similar to the US committee on foreign investment.

If anything, some European governments maintain excessive controls on foreign investment, unnecessarily restricting the ability of their defence companies to access capital.

In France, one of the most closed countries to foreign ownership in Europe, not only is the state a significant shareholder in several large defence companies but it also resorts extensively to golden shares, strict shareholding agreements and ministerial committees to regulate foreign investments.

In addition, in the unlikely event that an unwelcome investor managed to take control of a defence company despite government controls, the state could make it impossible for the company to operate. It could refuse to grant export licences to the company or buy the military equipment it produced.

European states have often discouraged acquisitions within their defence industries by other European defence manufacturers - mostly to the benefit of their national producers.

In light of such a cautious attitude, it is highly unlikely that a hostile investor from Russia or the Middle East would succeed where companies based in neighbouring EU countries had failed.

So while remaining vigilant, governments and defence firms should be open to sovereign investments in principle.

But while national rules are sufficient to control foreign investments in today's European defence industry they will be less effective once governments take further steps to integrate their defence markets.

For years, EU member-states have acknowledged that their fragmented national industrial bases are too small to sustain and they have committed to liberalise their markets. So far, governments have been slow to deliver on that objective.

But as the cost of defence equipment spirals upwards and budgets continue to shrink, the pressure on member states to open defence markets will grow.

If pan-European supply chains develop, EU countries will become increasingly reliant on defence companies based in other member states to provide them with parts or finished military equipment. The German army might rely on radios produced by a company in Sweden and deployed German troops could be put at risk if the owners of a Swedish defence company decided to stop producing such equipment.

When EU member states move to an integrated European defence market, they should introduce a co-ordinated system to monitor foreign investment in the defence sector across the EU.

European governments should create a common investigative committee that would oversee foreign bids and block any that could pose a risk to the security interests of any EU member state. The membership of the committee ought to include representatives from the different EU countries with large defence industries.

Such a system would increase transparency and simplify procedures for investors. It would also help to give EU member states stronger guarantees on their security of supply.

Clara Marina O'Donnell is a research fellow at the Centre for European Reform

* Yale Centre for the Study of Globalisation


July 5, 1994: Jeff Bezos founds Cadabra Inc, which would later be renamed to, because his lawyer misheard the name as 'cadaver'. In its earliest days, the bookstore operated out of a rented garage in Bellevue, Washington

July 16, 1995: Amazon formally opens as an online bookseller. Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought becomes the first item sold on Amazon

1997: Amazon goes public at $18 a share, which has grown about 1,000 per cent at present. Its highest closing price was $197.85 on June 27, 2024

1998: Amazon acquires IMDb, its first major acquisition. It also starts selling CDs and DVDs

2000: Amazon Marketplace opens, allowing people to sell items on the website

2002: Amazon forms what would become Amazon Web Services, opening the platform to all developers. The cloud unit would follow in 2006

2003: Amazon turns in an annual profit of $75 million, the first time it ended a year in the black

2005: Amazon Prime is introduced, its first-ever subscription service that offered US customers free two-day shipping for $79 a year

2006: Amazon Unbox is unveiled, the company's video service that would later morph into Amazon Instant Video and, ultimately, Amazon Video

2007: Amazon's first hardware product, the Kindle e-reader, is introduced; the Fire TV and Fire Phone would come in 2014. Grocery service Amazon Fresh is also started

2009: Amazon introduces Amazon Basics, its in-house label for a variety of products

2010: The foundations for Amazon Studios were laid. Its first original streaming content debuted in 2013

2011: The Amazon Appstore for Google's Android is launched. It is still unavailable on Apple's iOS

2014: The Amazon Echo is launched, a speaker that acts as a personal digital assistant powered by Alexa

2017: Amazon acquires Whole Foods for $13.7 billion, its biggest acquisition

2018: Amazon's market cap briefly crosses the $1 trillion mark, making it, at the time, only the third company to achieve that milestone


Director: Lee Isaac Chung

Starring: Glenn Powell, Daisy Edgar-Jones, Anthony Ramos

Rating: 2.5/5

Intercontinental Cup

Namibia v UAE Saturday Sep 16-Tuesday Sep 19

Table 1 Ireland, 89 points; 2 Afghanistan, 81; 3 Netherlands, 52; 4 Papua New Guinea, 40; 5 Hong Kong, 39; 6 Scotland, 37; 7 UAE, 27; 8 Namibia, 27


Director: Ismael Ferroukhi

Stars: Zakaria Inan, Sabrina Ouazani

3 stars

Florence and the Machine – High as Hope
Three stars

Libya's Gold

UN Panel of Experts found regime secretly sold a fifth of the country's gold reserves.

The panel’s 2017 report followed a trail to West Africa where large sums of cash and gold were hidden by Abdullah Al Senussi, Qaddafi’s former intelligence chief, in 2011.

Cases filled with cash that was said to amount to $560m in 100 dollar notes, that was kept by a group of Libyans in Ouagadougou, Burkina Faso.

A second stash was said to have been held in Accra, Ghana, inside boxes at the local offices of an international human rights organisation based in France.


Liverpool 4 Southampton 0
Jota (2', 32')
Thiago (37')
Van Dijk (52')

Man of the match: Diogo Jota (Liverpool)

EU's 20-point migration plan

1. Send EU border guards to Balkans

2. €40 million for training and surveillance

3. Review EU border protection

4. Reward countries that fund Balkans 

5. Help Balkans improve asylum system

6. Improve migrant reception facilities 

7. Close gaps in EU registration system

8. Run pilots of faster asylum system

9. Improve relocation of migrants within EU

10. Bolster migration unit in Greece

11. Tackle smuggling at Serbia/Hungary border

12. Implement €30 million anti-smuggling plan

13. Sanctions on transport linked to smuggling

14. Expand pilot deportation scheme in Bosnia 

15. Training for Balkans to deport migrants

16. Joint task forces with Balkans and countries of origin

17. Close loopholes in Balkan visa policy 

18. Monitor migration laws passed in Balkans 

19. Use visa-free travel as leverage over Balkans 

20. Joint EU messages to Balkans and countries of origin


Company name: Almouneer
Started: 2017
Founders: Dr Noha Khater and Rania Kadry
Based: Egypt
Number of staff: 120
Investment: Bootstrapped, with support from Insead and Egyptian government, seed round of
$3.6 million led by Global Ventures


Company name: Klipit

Started: 2022

Founders: Venkat Reddy, Mohammed Al Bulooki, Bilal Merchant, Asif Ahmed, Ovais Merchant

Based: Dubai, UAE

Industry: Digital receipts, finance, blockchain

Funding: $4 million

Investors: Privately/self-funded


Bantamweight 56.4kg
Abrorbek Madiminbekov v Mehdi El Jamari

Super heavyweight 94+kg
Adnan Mohammad v Mohammed Ajaraam

Lightweight 60kg
Zakaria Eljamari v Faridoon Alik Zai

Light heavyweight 81.4kg
Mahmood Amin v Taha Marrouni

Light welterweight 64.5kg
Siyovush Gulmamadov v Nouredine Samir

Light heavyweight 81.4kg
Ilyass Habibali v Haroun Baka

'Falling for Christmas'

Director: Janeen Damian

Stars: Lindsay Lohan, Chord Overstreet, Jack Wagner, Aliana Lohan

Rating: 1/5

The Specs

Engine: 1.6-litre 4-cylinder petrol
Power: 118hp
Torque: 149Nm
Transmission: Six-speed automatic
Price: From Dh61,500
On sale: Now

Company Profile

Company name: Cargoz
Date started: January 2022
Founders: Premlal Pullisserry and Lijo Antony
Based: Dubai
Number of staff: 30
Investment stage: Seed


Starring: Lupita Nyong'o, Joseph Quinn, Djimon Hounsou

Director: Michael Sarnoski

Rating: 4/5

Meydan racecard:

6.30pm: Handicap | US$135,000 (Dirt) | 1,400 metres

7.05pm: Handicap | $135,000 (Turf) | 1,200m

7.40pm: Dubai Millennium Stakes | Group 3 | $200,000 (T) | 2,000m

8.15pm: UAE Oaks | Group 3 | $250,000 (D) | 1,900m

8.50pm: Zabeel Mile | Group 2 | $250,000 (T) | 1,600m

9.20pm: Handicap | $135,000 (T) | 1,600m


Company name: Revibe
Started: 2022
Founders: Hamza Iraqui and Abdessamad Ben Zakour
Based: UAE
Industry: Refurbished electronics
Funds raised so far: $10m
Investors: Flat6Labs, Resonance and various others

Why it pays to compare

A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.

Route 1: bank transfer

The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.

Total cost: Dh567.25 - around 2.9 per cent of the total amount

Total received: €4,670.30 

Route 2: online platform

The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.

Total cost: Dh74.10, around 0.4 per cent of the transaction

Total received: €4,756

The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.

First-round leaderbaord

-5 C Conners (Can)

-3 B Koepka (US), K Bradley (US), V Hovland (Nor), A Wise (US), S Horsfield (Eng), C Davis (Aus);

-2 C Morikawa (US), M Laird (Sco), C Tringale (US)

Selected others: -1 P Casey (Eng), R Fowler (US), T Hatton (Eng)

Level B DeChambeau (US), J Rose (Eng) 

+1 L Westwood (Eng), J Spieth (US)

+3 R McIlroy (NI)

+4 D Johnson (US)


Solo: A Star Wars Story

Dir: Ron Howard

Starring: Alden Ehrenreich, Emilia Clarke, Woody Harrelson



The flights

Etihad ( and flydubai ( fly direct to Baku three times a week from Dh1,250 return, including taxes. 

The stay

A seven-night “Fundamental Detox” programme at the Chenot Palace ( costs from €3,000 (Dh13,197) per person, including taxes, accommodation, 3 medical consultations, 2 nutritional consultations, a detox diet, a body composition analysis, a bio-energetic check-up, four Chenot bio-energetic treatments, six Chenot energetic massages, six hydro-aromatherapy treatments, six phyto-mud treatments, six hydro-jet treatments and access to the gym, indoor pool, sauna and steam room. Additional tests and treatments cost extra.


Director: Nikhil Nagesh Bhat

Starring: Lakshya, Tanya Maniktala, Ashish Vidyarthi, Harsh Chhaya, Raghav Juyal

Rating: 4.5/5

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