As the maxim goes, “Buy in gloom, sell in a boom.” Aabar Petroleum Investments Company is certainly doing the first bit. On Mar. 22, it secured a 9.1 percent stake in embattled car manufacturer Daimler, for 1.95 billion euros ($2.65 billion) in cash.

As many analysts and commentators scratch their heads trying to work out when the markets will bottom out, this deal shows that cooler heads are prevailing at the business table, and that the phase of “wait and see” attitudes in this recession may be drawing to a close, at least in the Gulf region.

Matthew Wakeman, managing director of cash and equity at EFG-Hermes brokerage, sees the deal as, “a further move to diversify from [Abu Dhabi’s] dependence on oil for revenue, and increase its manufacturing knowledge and production. A premium brand such as this opens the doors for cooperation and regional expansion in the future,” he says.

“The timing is particularly good, as it provides Daimler with a cash injection at a very challenging time for the auto industry.”

Listed on the Abu Dhabi Securities Exchange, Aabar is mainly owned by the International Petroleum Investment Company (IPIC), which in turn is owned by the Abu Dhabi government. Aabar’s move represents a change in its strategic focus, widening its investment activities from the energy sector into areas such as finance and real estate. It was Aabar, for example, that quietly bought AIG Private bank after the US finance group’s financial problems were made public last year.

One day after the Daimler deal, Aabar completed the final payment and conversion of its bond issue into shares for IPIC, which now holds a 71 percent stake. This represents what is known as the Chinese box strategy – where parent companies retain controlling interest in smaller holding companies that own a stake in a corporate asset. (One of the more notable examples of this was the takeover of Telecom Italia in 1999 by Pirelli and the Benetton family.)

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