Abu Dhabi's ADQ makes merger offer to Abu Dhabi Aviation

Abu Dhabi sovereign wealth fund ADQ has made an offer to take a controlling stake in Abu Dhabi Aviation (ADA) to create a "globally competitive aviation business" with about AED 9.4 billion in assets.

ADQ said it would combine ADA with its 100 per cent shareholding in Etihad Engineering and Advanced Military Maintenance Repair and Overhaul Center (AMMROC) and with its 50 per cent stake in Abu Dhabi-controlled aviation services firm GAL.

ADA said in a stock exchange filing it would hold a board meeting on Wednesday to discuss the offer.

ADQ would own about 59 per cent of ADA's entire issued share capital under the deal, ADQ said.

It was not immediately clear how ADQ planned to merge an entity in which it does not have a controlling stake.

ADA, 30 per cent owned by another Abu Dhabi wealth fund, Mubadala, would issue a convertible instrument to ADQ that would convert into roughly 652 million shares of ADA when the transaction closes, ADQ said in a statement.

The converted shares of ADA would be priced at AED 6.14 a share, implying an equity valuation of about AED 2.7 billion, ADQ said.

ADQ's Chief Executive Mohamed al-Suwaidi said in the statement that the deal would "further position Abu Dhabi as a world-leading center of aviation excellence" and create an industry "champion".

If ADA's board approves the transaction, it would be subject to shareholder and regulatory approvals, ADQ said.