DAE to buy American aviation firms for $1.5 billion

22 Mar 2007

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Singapore: Dubai Aerospace Enterprise (DAE), a $15 billion global aerospace company, may shell out close to $1.5 billion in order to buy two aviation businesses from US private equity firm Carlyle Group, according to reports quoting informed sources.

According to sources, DAE is in an advanced stage of discussions to buy Landmark Aviation and Standard Aero Holdings Inc, both providing repair and overhaul services at airport terminals for small-jet aviation and some military transports, from Carlyle Group, a Washington, D.C.-based firm which has $44.3 billion under management.

As per reports, the deal may see the DAE buy and then sell Landmark's 33 business aircraft terminals in the US and Canada, keeping the company's aircraft maintenance operations. Standard Aero has only repair facilities.

DAE and Carlyle officials, however, were unavailable for comments on the reported buy-out.

Landmark Aviation repairs Boeing business jets among others and calls itself one of North America's largest providers of services for the business aviation industry. The company has repair facilities at 19 US locations. Canadian company, Standard Aero, repairs military and business aircraft for 1,400 customers, the biggest of which are Lockheed Martin Corp and Rolls Royce Group Plc.

The transaction is subject to review by the Committee on Foreign Investment in the United States (CFIUS), a Treasury Department agency, assigned to make sure that foreign investment doesn't compromise national security. DAE and Carlyle have yet to file an official request for review with the US security committee.

Industry analysts say that the deal is not expected to trigger a political firestorm in the US as was the case with DP World's acquisition of P&O terminals last year. US Senators had raised a storm of protest over the DP World deal, making it clear that allowing a state-owned Arab firm control of US port terminals would pose a threat to national security. DP World later agreed to sell the port operations to settle US congressional concern.

A consortium led by DAE Airports, a division of DAE, is aiming at garnering a slice of $120 billion in airport projects that are due to come up by 2014 in Africa, the Middle East, India and China. The consortium comprises DAE Airports and six other top UAE companies and offers a one-stop solution for airport needs. The consortia partners are real estate-company Emaar, air services supplier DNATA, aviation industry technology firm Mercator, Emirates National Oil Company, Amlak Finance and Dubai Airports Free Zone Authority.

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