Mubadala Development Company has struck a US$2 billion investment deal with Brazil's EBX Group, a diversified company with interests in oil and gas, gold, logistics and other sectors.
In return, Mubadala will be granted a 5.63 per cent stake in Centennial Asset Brazilian Equity Fund and other offshore holding companies of Eike Batista, the founder of EBX Group.
"Partnering with world-class companies is a key element of our investment and development strategy and we are proud to announce this partnership with Eike and EBX, one of Brazil's and the world's leading and most dynamic groups," said Khaldoon Khalifa Al Mubarak, chief executive and managing director of Mubadala, which is a strategic investment company owned by the Abu Dhabi Government.
"This well-structured transaction marks our first significant direct investment into one of the fastest growing markets and is an important step in Mubadala's development of strategic opportunities in Brazil and Latin America," he added.
As part of the agreement, Mubadala will also be able to participate in a pipeline of future business opportunities, including investments in technology companies, fertilisers and cement - which is among the materials most often used in fast-growing markets.
About two-thirds of the world's economic growth is expected to be generated by emerging markets in the next four years, according to a report released last year by the Economist Intelligence Unit on GCC trade and investment flows.
Latin America appeared to have the weakest trade ties with countries in the Gulf, the report noted, although Brazil accounted for 85 per cent of the total trade made between the two regions in 2009.
A spokesperson for Mubadala says the company views its investment in EBX as "one of the best ways to engage with the Brazilian market." EBX's portfolio of businesses that were seen as the most attractive hold interests in sectors such as oil and gas, iron-ore, gold and coal.
For EBX, this marks the first time the company has invited a strategic partner to invest at a holding company level, Mr Batista said.