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Tue, Nov 20, 2007 - Page 10 News List

Abu Dhabi-backed investment firm picks up AMD stake

THE GUARDIAN , LONDON

An investment company owned by the Abu Dhabi government has picked up an 8.1 percent stake in the second-largest maker of computer microprocessors in a move likely to raise concerns among US politicians over the increasing influence of Arab nations on the US economy.

Advanced Micro Devices (AMD), based in Sunnyvale, California, and listed in New York, sold the stake to help finance the building of a new plant and recent acquisitions as it competes with market leader Intel. Mubadala Development Co, set up in 2002, paid US$622 million for its 49 million new shares.

It is the latest so-called sovereign wealth fund to use the proceeds of the soaring oil price to buy into western companies. Merrill Lynch estimates that the amount of money these vehicles have to invest in shares, government bonds, property and other assets outside their home markets will rise from just under US$2 trillion this year to almost US$8 trillion in 2011.

Earlier this year Mubadala bought a 7.5 percent stake in Carlyle Group, arguably the most influential private equity firm in the US, and also has a stake in Ferrari. Investment funds backed by the government of neighboring Qatar, meanwhile, have bought into the London Stock Exchange and were behind the recent abortive bid for UK supermarket group J. Sainsbury PLC. Dubai International Capital, meanwhile, has stakes in the US hedge fund manager Och-Ziff Capital Management Group, the Indian bank ICICI and the defense firm EADS.

But the increasing influence of funds from Arab nations has raised worries among politicians in Washington, especially when it involves investment in potentially crucial intellectual property in areas such as defense and technology.

Dubai's announcement of a planned investment in the NASDAQ technology market, for instance, drew a response from US President George W. Bush that the deal's "national security implications" would be fully explored before the deal was approved.

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