ABU DHABI (Reuters) - The United Arab Emirates is merging its two flagship state aluminum firms to create the world's fifth largest aluminum company with an enterprise value of $15 billion.
The merger will improve efficiency and help the emirate's aluminum industry better compete with rivals in the region. UAE has been planning the move for three years.
The new entity, Emirates Global Aluminium, will be jointly held by Dubai Aluminium (Dubal) and Emirates Aluminium (Emal). Dubal is owned by the Investment Corporation of Dubai (ICD,) while Emal is a joint venture between Abu Dhabi state sovereign fund Mubadala and ICD.
"Emirates Global Aluminium will build on strong foundations of leadership, to become a major industrial champion and engine of economic development for our people," Khaldoon Khalifa al-Mubarak, chief executive of Mubadala, and the chairman of the new entity said in the statement.
In 2011, Dubal Chairman Sheikh Hamdan Bin Rashid Al-Maktoum, a ruling family member, was quoted by a local newspaper as saying that Mubadala had offered to buy a stake in DUBAL, without providing more details.
The merged entity will have an aluminium production capacity of 2.4 million tonnes per year after the completion of Emal's phase two operations in mid-2014, the statement said.
Emal is on track to complete its $4 billion phase two by the end of 2014, when it capacity will rise to 1.3 million tonnes from the current 800,000 tonnes a year. Dubal operates the largest single-site smelting facility in the world, built on a 480-hectare site in Jebel Ali, which has the capacity to produce more than one million metric tonnes of high quality finished aluminium products per year.
Abdulla Kalban, president and chief executive of Dubal will be the managing director and chief executive of the new firm.
ICD owns stakes in some of Dubai's largest firms, such as Emirates Airline EMIRA.UL and lender Emirates NBD ENBD.DU, while Mubadala has a mandate to develop Abu Dhabi's local economy and has assets of $55 billion.
Reporting by Stanley Carvalho and Dinesh Nair; Editing by Louise Heavens