Gulf and Waha Capital in possible merger talks

Gulf Capital and Waha Capital, two of Abu Dhabi’s most prominent investment firms, are reportedly in talks over a possible merger.

According to sources cited by Reuters, major shareholders at Gulf Capital such as Abu Dhabi Investment Council and Abu Dhabi Commercial Bank, have been pushing for a merger with Waha as the pressure from lower oil prices and reduced government spending continues to spur consolidation in the region’s financial sector. 

It has also been a turbulent time for private equity firms in the region ever since the 2018 collapse of Abraaj, once the biggest PE player in the region.

The two firms, Gulf and Waha, have around $4 billion and $3.2 billion respectively in assets under management.

According to one Reuters source, there should be more clarity about a possible merger in June, however there are a number of complicating factors.  For example, Gulf Capital has just announced a successful closing of a new long-term syndicated revolving credit facility worth $136 million, which is expected to finance a number of new deals.

According to Gulf Capital chief executive, Karim El Solh, the four year facility will secure its current funding needs and help boost liquidity. “We are looking forward to a productive 2019 as we maintain our investment pace and continue to work on a number of strategic exits over the coming year,” he said.

Meanwhile Waha Capital appointed a new chairman in March 2018 who is reportedly set to unveil a new strategy for the firm shortly and it is unclear if a merger is part of his plan.

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