Clayton Dubilier & Rice LLC, the New York-based buyout firm, is nearing an agreement to buy German industrial packager Mauser from Dubai International Capital for $1.7 billion, three people with knowledge of the matter said.
An agreement on the sale may be announced within a week after CD&R beat out competition from private equity firm Ardian, the people said, asking not to be identified because they weren’t authorized to speak publicly.
The Mauser sale would be the largest asset disposal by Dubai since it teetered on the brink of a default in 2009. The emirate is accelerating asset sales as it seeks to repay billions of dollars of debt accumulated by state-owned companies in a spending binge to make the city a trade and tourism hub.
DIC, owned by Dubai ruler Sheikh Mohammed Bin Rashid Al Maktoum’s Dubai Holding LLC, bought Mauser in 2007 from JPMorgan Chase & Co.’s One Equity Partners LLC in a deal valuing the company at 850 million euros ($1.2 billion). DIC, which owns stakes in companies such as U.S. hedge fund Och-Ziff Capital Management Group LLC and German alumina products maker Almatis, reached an accord with creditors on restructuring $2.5 billion of liabilities in 2012.
Nearly five years after the financial crisis, Dubai’s economy is rebounding, led by its property, trade and tourism industries. While most of the emirate’s state entities restructured debt by extending maturities, they promised full repayment through asset sales. They’re now stepping-up disposals as values improve with the recovery in financial markets.
Investment company Dubai Group LLC sold a 31 percent stake in Bank Islam in August for $550 million to BIMB Holdings, while DIC sold its stake in Dubai retailer Rivoli Investments LLC to Swatch Group AG (UHR) in November last year for an undisclosed amount.
Mauser was founded in a small town in the Black Forest in 1896 by Alfons Mauser, son of the inventor of the gun of the same name. The company builds packaging such as drums and cans for transporting chemicals and employs about 4,000 people.
Clayton Dubilier, founded in 1978, bought Ashland Inc’s water-technologies unit for about $1.8 billion in February.
A representative for CD&R declined to comment. DIC was not immediately available for comment.
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