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Saudi Prince Now 2nd-Largest GM Investor

Arabic investors targeting auto industry opportunities.

by on Nov.23, 2010

Saudi billionaire Prince Alwaleed now holds a 1% stake in GM, making him its 2nd-largest shareholder.

Saudi Prince Alwaleed bin Talal is now one of the largest shareholders in General Motors.

The royal billionaire, one of the world’s wealthiest men, announced through a spokesman that he has invested $500 million in the U.S. automaker which, last week, staged a long-awaited initial public offering.  The IPO proved far more successful than initially anticipated, in part due to the interest  — and cash – of foreign investors.

According to a statement out of the oil-rich kingdom, Alwaleed’s investment arm, Kingdom Holding Co., acquired about 1% of GM stock.  The maker sold 358 million shares of common stock as part of its return to public trading, along with another 80 million convertible preferred shares.  The common shares were priced at $33 apiece, though KHC declined to provide the details of its purchase.

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The investment firm did note that it was placing its financial bet based on “the global strength of General Motors brand, the relatively attractive offering price, and the company’s growth prospects in Brazil and China.”

General Motors last month became the first automaker to sell 2 million vehicles in a single year in the latter market.  It has also announced plans to expand its presence in China – and press into promising India – by expanding its ties with Chinese partner, SAIC.

Based on KHC’s statement it appears the royal investor now holds about the same stake in GM as the Shanghai-based manufacturer, SAIC taking a 0.97% stake through the IPO.

Prince Alwaleed is an active investor in a number of Western companies, ranging from Disney to Citibank.  Though several sovereign Mideast investment funds had expressed an interest in the GM IPO only KHC ultimately made an investment.

But several Mideast funds, notably including the Saudis and Kuwaitis, have become active in the auto industry in recent years.  In 2007, Ford Motor Co. sold its British luxury marque Aston Martin to a consortium that included David Richards, CEO of Prodrive and Chairman of Aston Martin Racing, and two Kuwaiti banks.

Mideastern investors have also placed significant bets on Germany’s various automakers, notably including Daimler AG and Volkswagen AG.

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