Washington (Caasimada Online) – The US government is reviewing a plan proposed by Abu Dhabi’s sovereign wealth fund, Mubadala, to acquire a majority stake in the New York-based Fortress Investment Group.
According to the Financial Times, concerns over national security issues arising from the UAE’s connections to China have prompted this review.
Mubadala, a holding company that functions as a sovereign wealth fund, set plans to procure a significant share in the $46bn US firm from Japan’s SoftBank Group in May.
This strategic acquisition is set to culminate in 2024 and will endow the Emirati fund with a 70 percent stake in Fortress’ equity.
UAE’s China ties: A recurring hurdle
The Committee on Foreign Investment in the United States (CFIUS) has the deal under its purview, and the review is reportedly in its “early stages.”
However, the UAE’s ties to China have become a recurrent issue in its relations with Washington.
Most notably, these ties played a crucial role in derailing Abu Dhabi’s negotiations with Washington to acquire the F-35 fighter jet over concerns that Beijing could access sensitive US technologies.
This situation illustrates the mounting competition between Washington and Beijing in the Gulf region.
Notably, China has positioned itself as the primary buyer of Gulf states’ oil and has provided sensitive technology to Saudi Arabia, Qatar, and the UAE.
Last year, Chinese tech giant Huawei secured a contract to launch 5G technology in the Emirates, signaling a strategic win.
An independent foreign policy
Increasingly, Saudi Arabia and the UAE have been willing to adopt a less dependent foreign policy on Washington.
These shifts emerge amidst concerns over the US’s commitment to their security.
In May, the UAE withdrew from a US-led multinational security force tasked with protecting Gulf shipping.
This decision followed an article in the Wall Street Journal highlighting the UAE’s dissatisfaction with Washington’s lukewarm response to Iran’s seizure of two oil tankers in the Gulf of Oman.
Though the UAE views Iran as a significant threat, it has recently been taking steps to mend ties with the Islamic Republic, including reappointing an ambassador earlier this year. Saudi Arabia soon followed suit in a move facilitated by China.
In the UAE, a nation of seven small monarchies led by Abu Dhabi, business and security are intrinsically linked.
The UAE’s powerful national security advisor, Sheikh Tahnoun bin Zayed al-Nahyan, known for his signature aviator sunglasses, heads the Abu Dhabi Investment Authority, a massive $790bn sovereign wealth fund.
The investigation into this planned acquisition underlines the importance of balancing economic interests with national security considerations, particularly in a global landscape marked by shifting allegiances and emerging superpowers.