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Abu Dhabi Group International Holding Company (IHC) announced on Thursday that it, through one of its subsidiaries, has acquired a 50 percent stake in Turkey’s Kalyon Energy for AED 1.8 billion ($490 million).
Kalyon Enerji is part of the Turkish conglomerate Kalyon Holding, which operates in the construction, energy and aviation industries. IHC subsidiary International Energy Holdings (IEH) will acquire the stake, the group said.
In a statement to the Abu Dhabi stock market, IHC said the deal included solar power projects in the Karapınar and Gaziantep areas in Türkiye and a wind power project in Ankara.
IHC is the most valuable company on the Abu Dhabi Exchange, with a market capitalization of approximately $167 billion.
Chief executive Syed Basar Shueb said the deal was IHC’s second-largest acquisition in the renewable energy sector.
Kalyon Holding, which owns a number of solar and wind concessions in Türkiye, was reported to be in advanced talks with IHC over a strategic asset partnership in June.
Cemal Kalyoncu, chairman of Kalyon Holding, said in a statement that the deal is important not only for Turkey and the United Arab Emirates (UAE), but also on a regional scale.
“The measures we have taken in the energy sector and the investments we have made have attracted the attention of foreign investors,” Kalyoncu noted.
“As a result of our meeting and mutual evaluation with IEH, we agreed to transfer 50% of Kalyon Energy shares. This partnership will be one of the most important milestones for Kalyon Holding to become a global brand.”
“As climate change is the defining challenge of our time, we will continue to intensify our efforts to transform the world into a sustainable green economy,” he added.
Türkiye imports the vast majority of its energy, and in 2017 it started a large-scale tender for solar and wind power plants in order to boost its renewable energy production.
The Kalyon Karapınar solar power plant included in the deal, once completed in 2023, will be able to meet the annual electricity needs of 2 million people, IHC said.
The 1,350 megawatt (MW) solar power plant is under construction in the central province of Konya. It will be the largest single-site solar power plant in Europe and one of the five largest in the world. The total investment for the mega project is estimated to be around $1 billion.
Kalyon also owns a solar panel factory in Ankara with an annual capacity of 1,000 MW. Kalyoncu said that capacity is now targeted to increase to 2,000 megawatts.
He added that the new capital will provide Türkiye with a notable foreign exchange inflow and will be used to increase new solar and wind investments.
The agreement follows a visit by the current President of the United Arab Emirates, Sheikh Mohamed bin Zayed Al Nahyan, to Turkish President Recep Tayyip Erdogan last November.
During the visit, the first in years as the two regional rivals worked to mend tensions and strengthen economic cooperation, Emirati and Turkish officials signed multi-billion-dollar investment deals, including an energy deal.
The IHC is chaired by Sheikh Tahnoun bin Zayed Al Nahyan, UAE National Security Advisor and brother of Sheikh Mohammed.
Acquisitions in a “buy-side” market
IHC expects to increase its acquisition activity, including in India and Türkiye, as turmoil in global markets creates a “buyer’s market,” Shueb said on Wednesday.
IHC is targeting listed companies in growth markets, Shueb told Reuters, adding that it was also looking at South America and Indonesia.
“The public domain market has indeed corrected itself with respect to certain assets,” he said.
“But in the private sector, it’s still difficult to negotiate with landlords because they’re all still living in an old world with extremely high valuations. It’s not a seller’s market, it’s a buyer’s market.”
IHC, which spans sectors ranging from healthcare to real estate to IT and utilities, made 70 acquisitions this year with a combined value of AED10 billion ($2.72 billion).
Its most high-profile deals include a Dh7.3 billion investment in three companies in Gautam Adani, India, in May.
Rising interest rates and forecasts of a global recession make IHC more selective because private market valuations don’t reflect current market conditions, Shueb said.
He also said the company is pursuing large acquisitions, rather than smaller deals, to boost its profits, although he did not specify how large.
The company on Monday reported a 137% year-on-year rise in first-half net profit to AED10.35 billion. Shares in IHC have risen more than 120% so far this year to AED348 per share.
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