The decision was planned a few years ahead, and the venture has explicit support from the UAE. Since the commanding package of bonds is owned by the Abu Dhabi government, the decision will have little to no unintended and unperceived consequences for the majority of bondholders. An additional rationale for the merger is as follows (Emirates NBD, 2016): It will also encourage foreign companies to come to Abu Dhabi in order to establish offices and production facilities, which is in line with the country’s long-term economic development plan. This merger will help the companies realize their synergies while diversifying their products to encompass a great array of potential ventures, including energy, utilities, technology, aerospace, manufacturing, healthcare, real estate, and financial investment sectors (Emirates NBD, 2016). From this perspective, the integration of two entities has the potential to create greater economic value for the government. The main shareholder for both companies is the Abu Dhabi government, meaning that both organizations, while separate, operate under the same owner (Emirates NBD, 2016). There are numerous financial, organizational, and political reasons underlying the merger between APIC and Mubadala. The proposed change is meant to answer all of these issues and is further elaborated on in the section below. Mubadala does not have specialists, contacts, and the infrastructure to enter the petroleum investment market, whereas IPIC cannot venture towards the technological market without significant expenditures. Lastly, each individual company is having issues entering the international market and pursuing opportunities outside of their area of expertise. As a result, it is more difficult to cooperate between the companies even if they have the interests of a shared client in mind. This creates a discrepancy, which leads to a loss of money and business opportunities since many international players would rather deal with entities that provide the whole package.Īnother issue that arises from separation is a different set of practices, standards, and documents, which may not always correlate well with one another (US-UAE Business Council, 2017). Likewise, a client wishing to deal in petroleum and technology at the same time will have to separately address both companies. A customer seeking investments in technology is not directed from APIC to Mubadala, just as one seeking to operate in oil exchanges is not referred by Mubadala to APIC in return. The organizations, despite being owned by the same entity, do not maintain a connection and information exchange. This means there are two directorial boards, two middle manager cores, and two sets of employees, each focused on their respective duties. Presently, both APIC and Mubadala have their separate command and control structures (US-UAE Business Council, 2017). Identification of Change Existing Situationīefore the merger occurred, the companies operated independently, while a joint committee was established with the purpose of creating a plan for merging and the corresponding changes that were to take place. The purpose of this report is to identify the major changes for Mubadala Investment Company, highlight the purposes of these changes in relation to the significance of the problem, and propose a model for organizational change along with recommendations. A successful resolution to change can make the company stronger and more resilient in the long-term perspective. An HR manager has to understand the routines and the underlying issues in the context of a large merger such as the one between APIC and Mubadala. The entire structure of the company had to be reinvented to encompass new employees, transform the decision-making apparatus, and enhance the capacity of the organization to handle larger amounts of finances necessary to operate in the investment markets outside of Abu Dhabi and the UAE.Ĭhange management is a complex process that involves theoretical and practical expertise. However, such a move presented a myriad of issues related to change management.
The merger meant to unite their financial and operational capacity in order to compete in international markets.
Although both ATIC and IPIC were created and operated under the Abu Dhabi government, they were fully independent organizations dedicated to different aspects of investments.
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