Foreign investment company Dubai International Capital said
on Monday that it has made a “substantial” investment in Sony. While
spokespeople for the company are not revealing the size of the investment, the Wall
Street Journal believes that the stake is less than 5 percent, as any
higher the firm would be required to make a public disclosure according to Japanese
law – but no such disclosure has been made.
Dubai International Capital’s (DIC) investment, even at just
under 5 percent, is considered substantial considering Sony’s largest
shareholder Dodge & Cox is recorded to own 8.3 percent. The investment
company said that it chose Sony because of its “ongoing strategy of focusing on
capital efficiency and cash generation,” and that it expects its shares to grow
in the medium term, serving as a vote of confidence for the Japanese
Quickly following news of the Dubai buy, shares
of Sony Corp. rose 4.54 percent or 250 yen, closing at 5,750 yen with 18.01
million shares changing hands on the Tokyo Stock Exchange. Conversely, Nintendo
shares fell 1.28 percent or 800 yen to 61,700 yen.
DIC, owned by Dubai Emir Sheikh Mohammed bin Rashid
al-Maktoum, was founded in 2004 with $13 billion. According to Dow
Jones, DIC plans to raise a further $600 million following its buy into
Sony. Due to the swell in energy prices, Middle Eastern funds have trickled
into technology investments. Mubadala Development Company, a United Arab
Emirates government-funded investment firm based in Abu Dhabi, has acquired an 8.1 percent
stake in AMD for $622 million.
As the oil reserves that many Middle Eastern fortunes are
built upon are depleted, those with supreme wealth are looking to diversify
their assets to ensure their continuing riches. Companies such as Sony,
however, appear to welcome the investment.
“We are happy that DIC has recognized the strength of the
Sony brand as well as our unique competitive advantage in having both
entertainment and electronics assets to drive our businesses forward,” said Sony
Corp. CEO Sir Howard Stringer in a prepared statement.