Middle Eastern Investment Company Buys Piaggio Portion

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Piaggio Aero Industries S.p.A., manufacturer of the Avanti and Avanti II twin pusher turboprops, last week announced that Mubadala Development, a principal investment company wholly owned by the Government of Abu Dhabi, has acquired 35 percent of the Italian airframer's equity. According to Piaggio, the transaction is based on the two companies' "shared belief ... that the business aviation segment will continue to expand significantly over the foreseeable future." The working capital coming into Piaggio will enable it to benefit from that opportunity, while Mubadala Development expects that same expanding market to produce favorable returns on its investment. Piaggio says its current order book numbers more than 100 airframes valued at more than $820 million. "We have had extraordinary success in both the European and North American business aviation markets," said Piero Ferrari, chairman of Piaggio Aero S.p.A., on announcing the investment. "This deal places us in a position to further grow our position in those markets whilst beginning to explore new markets, including the Middle East, Far East and South America - each of which offers high potential for sales."

Commenting on the deal, Khaldoon Al Mubarak, CEO of Mubadala Development, said: "For us this investment makes commercial sense on two levels. As a straight investment opportunity Piaggio Aero has a remarkable performance track record. Importantly, the transaction also offers the opportunity to explore potential synergies that both Piaggio and Mubadala can leverage." Mubadala Development’s investment involves purchasing existing and new shares; Piaggio Aero’s primary shareholders are the Ferrari and di Mase families. As a result of the transaction they will now hold 55 percent of the share capital of the company. Together with Mubadala’s 35-percent stake, this accounts for 90 percent of the share capital of the Company. The other 10 percent is held by a mixture of banks and other shareholders. As part of the transaction, Mubadala will receive three board seats of Piaggio, out of a total of seven, including the post of vice-chairman. Financial terms of the transaction were not disclosed.