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Abu Dhabi-backed Mubadala buys $2bn stake in Brazil’s EBX Group

27 Mar 2012

Abu Dhabi sovereign wealth fund Mubadala has made its biggest ever investment in Latin America by buying a $2bn stake in Brazil’s EBX Group.

The giant conglomerate has committed itself to spending $15.5bn through 2011 and 2012 across the oil, energy, logistics, mining and offshore industries, as well as lesser investments in areas such as real estate and entertainment.

Mubadala’s massive move into South America follows last November’s push into West Africa through a partnership with the Republic of Guinea, and October’s joint-venture into a petroleum coke operation in China.

The Guinea deal will see the pair explore investments in bauxite, alumina and iron ore, while the Chinese facility is a key supplier of materials used in aluminium smelting in the United Arab Emirates.

Its investment in EBX comes as the firm attempts to raise $1bn for shipbuilding and leasing company OSX Brazil.

Mubadala CEO and managing director Khaldoon Khalifa al-Mubarak said, “This well-structured transaction marks our first significant direct investment into one of the fastest growing markets and is an important step in Mubadala’s development of strategic opportunities in Brazil and Latin America.”

Alhough EBX’s primary focus is in Brazil it also has businesses in the Colombian and Chilean mining and port sectors, which could open these countries up to further investment from Mubadala.

The sovereign wealth fund saw its revenues increase by 70 per cent in the six months ending June 2011, compared to the same period last year, at about $3.7bn.

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