The United Arab Emirates has delayed plans to acquire a
defense subcontractor for the U.S. military.
Dubai International Capital announced a delay of its acquisition of the
Doncasters Group, a British firm that owns nine defense factories in the
United States.
Dubai International is a state-owned firm aligned with UAE
Defense Minister Mohammed Bin Rashid Al Maktoum, who is also the crown
prince of Dubai, Middle East Newsline reported.
Executives said they would wait until the United States completes an
examination of the proposed UAE takeover of Doncasters, estimated at $1.2
billion. They said the delay could extend through June 2006.
This was the second time in a month that the UAE agreed to delay a
takeover that involved critical operations in the United States. In early
March, the UAE state-owned Dubai Ports World agreed to shelve plans to
operate major U.S. ports as part of its acquisition of a British company.
"After what happened with Dubai Ports, the government is looking at this
deal more closely," Sameer Al Ansari, Dubai International's chief executive,
told the New York Times.
On Dec. 14, Doncasters, owned by the Royal Bank of Scotland Group,
agreed to a takeover by Dubai International. Doncasters has been regarded as
a supplier of components for major weapons platforms, such as main battle
tanks and aircraft, to the U.S. military. The company has been a
subcontractor of General Electric and General Dynamics.
Executives said 40 percent of Doncasters' revenues come from sales to
the U.S. military or prime contractors. They said a U.S. decision to halt
military purchases from Doncasters would torpedo the proposed UAE takeover.
In late February, the Committee on Foreign Investment in the United
States began a 45-day investigation into the proposed UAE takeover of
Doncasters. The committee is part of the Treasury Department, which earlier
approved DP World operations of U.S. ports.
The committee decision sparked threats from Congress to pass legislation
that would ban foreign operation of U.S. ports. At that point, DP said it
would sell the right to operate the
ports to a U.S. company.
