ALBAWABA – Abu Dhabi is on the verge of closing the deal on acquiring a stake in a key undisclosed Turkish port, unnamed sources have told Reuters.
In a Reuters exclusive, the Canada-based news agency reported a potential agreement brewing that would see AD Ports acquire shares in the Turkey Wealth Funds’ port management entity.
The Turkish entity will run the Aegean coast port of Izmir, the unnamed sources said.
So far, the size of the stake was not immediately clear but one of the sources said the deal could be valued at about $500 million, as reported by Reuters.
The port, owned by Turkey's sovereign wealth fund, is an important gateway that is in need of new investment, according to Reuters.
Reuters reached out to all of the parties involved in the said deal, but to no avail, the news agency reported.
The planned transaction comes as Turkey's government seeks foreign investment to accelerate its U-turn away from years of unorthodox economic policies.
These policies sent inflation soaring and the currency plunging, and drove an exodus of foreign investments.
Abu Dhabi's deal to buy the port is reportedly part of a series of investments after Turkey's new government reversed a series of unorthodox monetary policies under Erdogan's directions, which has seen inflation skyrocket and the currency plunge - Shutterstock
However, Turkey hopes that an aggressive rate-hiking cycle launched in June will draw back foreign investors, and some Western investors are starting to tip-toe back into markets, Reuters reported.
Turkish President Recep Tayyip Erdogan met with United Arab Emirates (UAE) President Sheikh Mohamed bin Zayed al-Nahyan on the sidelines of COP28 in Dubai, the recent United Nations (UN) climate summit.
Notably, ADQ is chaired by National Security Adviser Sheikh Tahnoun bin Zayed al Nahyan, a brother of Sheikh Mohamed.
Ports play a key role in the strategic shift in global manufacturing. Weaknesses in supply chains exposed by the COVID 19 pandemic and heightened geopolitical tensions are spurring a shake-up as companies seek to bring production closer to the point of sales.
Turkey and the UAE began to repair ties two years ago following a bitter rivalry that was in a large part driven by ideological difference. The rivalry saw the regional powers backing opposing sides in conflicts and disputes across the Middle East and North Africa.
The two countries agreed to a series of deals worth more than $50 billion in July as the Turkish president visited Gulf states in a bid to revive the economy, according to Reuters.
UAE officials have since said they see huge investment opportunities in Turkey, including in energy and logistics, Reuters reported. The Dubai state-owned port operating giant DP World bought a majority stake in a Turkish port earlier this year.
The UAE and Turkey signed a free trade agreement in May as well, which is meant to make investment easier.
