It also represents a new move in financing and leveraging deals in the region. Cash-rich Abu Dhabi is making its money go further than before. Where other Gulf investment houses overextended themselves in the boom, the strategy is sounder when your source of finance is not an overextended provider of credit.

Regional interest in the automotive industry is not new. Aabar’s acquisition overtakes the 6.9 percent stake held by Kuwait, an equity interest it has held since 1974. Dubai Holding’s investment vehicle, Dubai International Capital, has also bought into Daimler before.

However, Abu Dhabi is looking for more than just returns on this deal. Previously, Mubadala, Abu Dhabi’s investment and development vehicle, used its 5 percent stake in Ferrari to help secure a 20-year contract for a Formula One racetrack. Aabar’s purchase will likely see similar results. Daimler will work with Aabar on the development and production of innovative compound materials for use in auto manufacturing. Considering that Aabar’s parent company, IPIC, has a 64 percent stake in Austrian petrochemical manufacturer Borealis, and bought Canadian Nova Chemicals for $2.3 billion in February, it also represents a potential future source of revenue.

However, Aabar is keen to state that the deal is about more than just money. “All of these deals are about more than the commercial potential of them. It’s about long-term relationship, that there will be synergies between the different bits that are linking particular companies,” says a spokesman for Aabar. “The hope is that Aabar and Abu Dhabi can learn from the expertise that Daimler already has.” 

Yet the most important aspect of this deal is that it shows Abu Dhabi’s clearly on the path to diversify beyond its oil and gas revenues, building new opportunities to make money. In the same month that a Saudi official purportedly railed ag-ainst the threat to the Gulf’s long-term petroleum sales from alternative energy sources to tackle global warming, actions seem to speak louder, and far more sensibly, than words.

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