Middle East Business Review – 7 February

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Glencore Intl, the world’s largest publicly traded commodities supplier, has agreed to buy copper and zinc giant Xstrata for AED 227.7 billion ($61.99bn) in what is seen as the world’s biggest mining takeover. The Switzerland-based company, which enjoys major investment from Abu Dhabi’s Aabar, owns mines, plants, ports and warehouses in more than 40 countries around the world. Glencore, owner of a 34% stake in Xstrata, struck a “merger of equals” agreement with the Swiss infrastructure investment firm while offering 2.8 new shares for each Xstrata share, the companies said in a joint statement. Xstrata Chief Executive Officer Mick Davis will become the CEO of the combined group while Glencore CEO Ivan Glasenberg will be the deputy CEO and president, the statement added.

Emirates Airline announced it is launching a three-day discount campaign offering customers up to 30% reductions on fares to selected destinations across its network. The discount bookings, available on handpicked return Business and Economy Class tickets up to 40 designations worldwide, are valid until 9 February while the offers can be availed till 10 June by making an outbound travel. ?Whether travelling for leisure or business, our three day sale provides customers with the opportunity to reach their desired destination for less,? Khalid Bel Jaflah, Emirates vice president Commercial Sales UAE, said.

Meanwhile, Emirates Airlines has asked Dubai Islamic Bank, Ajman Bank and Al Hilal Bank to arrange a AED1.9 billion ($517.3 million) Islamic loan facility to finance deals for two Airbus A380 super jumbos and one Boeing 777-300 air craft. Mohammad Berro, chief executive of Abu Dhabi government-owned Al Hilal Bank confirmed with Reuters the deal is taking place while adding that the loan will be a 12-year facility and the paperwork for the deal will be completed by the end of this month.

According to latest data released by TRI Hospitality Consulting group, hotels in Dubai and Riyadh performed the best in the Middle East region during 2011. The report said Dubai hotels’ occupancy levels moved up to 85.1% while average room rates (ARR) rose 7.6% to $205.50. Riyadh, on the other hand, posted the highest ARR of $261.89 with an occupancy rate of 60.4%. “Hotels in the UAE have so far been the largest beneficiaries with Dubai in the lead whilst we see a trickle down effect on hotels in other parts of UAE as well,” Peter Goddard, managing director, TRI Hospitality Consulting, said in the report.

According to preliminary estimates published by the Doha central bank, the State of Qatar posted a hefty surplus budget of 42.2billion Qatari riyals ($11.6 billion) during the July-September quarter last year reversing a deficit of 2.2 billion Qatari riyals posted during the previous quarter. Data also showed that government spending also rose by nearly 24% during the same period. The gas-rich sheikhdom pencilled in spending worth QR139.9bn ($38.42bn) and a surplus of QR22.5bn ($6.29bn), or 4.9 percent of GDP in its 2011/12 budget.

A UN report has revealed that rapid growth in the world’s population, coupled with global financial crisis, is exacerbating a new problem ? the highest number of unemployed youth in history with ‘disturbingly high levels’ in the Middle East and North Africa region. “Today we have the largest generation of young people the world has ever known. They are demanding their rights and a greater voice in economic and political life. We need to pull the UN system together like never before to support a new social contract of job-rich economic growth. Let us start with young people,” UN Secretary-General Ban Ki-moon said in a press report.

(By Moign Khawaja – Editor: Arabian Gazette)

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