Two of Abu Dhabi’s largest investment funds International Petroleum Investment Company (IPIC) and Mubadala Development Company are merging on the order of the government.  IPIC was formed in 1984 to invest in energy and related industries globally. Today it has stakes in more than 18 companies encompassing oil and gas exploration and production, marketing, petrochemicals and power. Mubadala was set up in 2002 with the aim of diversifying Abu Dhabi’s economy away from oil and investing in ventures that could bring technology transfer and other strategic benefits to the emirate. IPIC’s assets include a stake in Vienna-based polyethylene maker Borealis AG, Spanish energy company Cepsa SA and US petrochemicals company Nova Chemicals. IPIC is also in the middle of a row with Malaysia’s 1MDB and has asked a London court to arbitrate in a dispute with the Malaysian state fund over a debt restructuring in which IPIC is claiming USD6.5bn. Mubadala’s 11 divisions include investments in oil and gas, aerospace, semiconductors and real estate. Some of its higher-profile holdings include stakes in semiconductor producer Globalfoundries Inc. and global private equity company Carlyle Group. While the combined company would have assets of USD135bn, the assets of both are nearly identical, IPIC’s debt (USD30bn) is about triple that of Mubadala’s (USD12bn). Both funds are unlisted and owned by the Abu Dhabi government and have identical credit ratings and are backed by the Abu Dhabi government. The tie-up, which is being approached as a merger of equals, should be completed by end of 2017. (Bloomberg, Reuters)