Engie-supported National Central Cooling, also known as Tabreed, is currently engaged in exclusive negotiations with CVC to acquire Multiply Group’s district cooling division located in Abu Dhabi. This transaction is anticipated to value the business at over $1 billion, according to two sources familiar with the situation.
### Key Developments
– Tabreed and private equity firm CVC emerged as the leading bidders for PAL Cooling Holding (PCH). Sources indicated that discussions with the seller have commenced.
– One insider mentioned that the proposed bid is approximately $1.1 billion.
– This interest in PCH reflects a growing trend of international investment firms eyeing opportunities in the Gulf region, as local governments seek to diversify their economies away from oil dependency.
### Official Responses
In a statement, Tabreed refrained from commenting on market speculation but noted that any significant transactions would be reported to the market once completed. CVC also chose not to comment, while Multiply Group has yet to respond to inquiries.
### Market Context
Earlier reports indicated that CVC was collaborating with Tabreed to place a joint bid for PCH. District cooling systems, which provide chilled water through insulated pipelines to cool various buildings, represent a cost-effective and environmentally friendly alternative to conventional air conditioning. They have become increasingly popular in the United Arab Emirates and other parts of the Arabian Peninsula, particularly where summer temperatures can exceed 50 degrees Celsius (122 degrees Fahrenheit).
PCH, established in 2006, boasts several facilities in Abu Dhabi with a total design capacity of 242,000 refrigeration tonnes, according to information available on its website. Previous reports also noted interest from other bidders such as KKR, I Squared Capital, Investcorp, and TAQA, with expectations that the sale could reach around $1 billion.
Multiply Group is under the control of IHC, whose chairman is Sheikh Tahnoon bin Zayed Al Nahyan, the UAE’s national security adviser and a sibling of the nation’s president, indicating a connection to a significant business network that includes two sovereign wealth funds.