Dubai Aerospace Enterprise has called off talks over a merger of assets with the British company BBA Aviation.
DAE halts discussions on merger of assets
Dubai Aerospace Enterprise said yesterday that it had broken off discussions with Britain's BBA Aviation about a potential merger of assets.
"Dubai Aerospace Enterprise (DAE) Ltd announced today it is no longer in discussions with BBA Aviation plc about a potential combination of certain parts of its business," the company said in a statement on its website.
A DAE spokeswoman declined to give further details about why talks with BBA had broken down.
The two companies announced late last month that they were holding preliminary discussions about a potential merger of some of their assets, following a report in The Sunday Times.
The report suggested that BBA, one of the world's largest providers of service bases for business jets, was looking to acquire its American rival Standard Aero, an Arizona-based engine repair and maintenance business owned by DAE.
Under the terms of the deal being discussed, DAE would acquire a stake in the combined repair and maintenance business, which would be valued at £2.7 billion (Dh15.47bn), and StandardAero at £1.3bn, the newspaper added.
DAE acquired StandardAero, together with Landmark Aviation, from The Carlyle Group in August 2007 for US$1.9 billion.
DAE was established in 2006 with the aim of supporting the growth of Dubai as an aerospace hub, and to boost the emirate in the aircraft leasing business.
The company has scaled back its investment following the 2008 financial crisis. Of 100 planes it ordered at the 2007 Dubai Airshow, DAE cancelled 45 Airbus planes valued at $5.8bn. In May it announced a slump in net profits from $121 million in 2011 to just $7.3m last year.
DAE operates on four continents, and employs about 3,700 people.
BBA is listed on the FTSE 250 in London, with a market capitalisation of £1.5bn. The company's group revenues increased 2 per cent in 2012 to $2.18bn.
The company recently announced the purchase of Jet Systems, an airport operator in the United States, for $38m. BBA's pretax profit in the first half of this year rose by 14 per cent to $78m.
BBA Aviation did not respond to requests for comment.