Food giant Mars has become one of the first multinationals to take advantage of the UAE’s new foreign direct investment (FDI) laws offering foreign companies 100 per cent ownership of onshore companies by buying out its local partner.
The company, which has had a presence in the UAE for 40 years, has bought all of the shares in its onshore Dubai subsidiary, in which it had previously held a 49 per cent stake. Foreign-owned companies could only own a minority stake in UAE companies until the introduction of the FDI law last year, although they could set up wholly-owned ventures within the country’s free zones, which were considered to be ‘offshore’ for regulatory purposes.
“Having a 100 per cent ownership company onshore will help strengthen our presence and development in the Middle East,” Karim Chabara, general manager of Mars Incorporated’s Gulf operations said.
Mars is a privately-owned food company that includes some of the world’s best-known confectionery brands as well as food brands such as Dolmio and Uncle Ben’s, and pet food brands Whiskas, Royal Canin and Pedigree. The company is still owned by the Mars family, and has revenue of $35 billion, although chief executive Grant Reid told Bloomberg in January this year that it would look to double this beyond $70bn within the next decade.
The company has invested more than $150 million in its UAE operations thus far, setting up an offshore presence within Jebel Ali Free Zone in 1993 before creating an onshore joint venture in 2013.
In 2017, following a $23bn deal to take over chewing gum maker Wrigley, Mr Chabara said that “Mars GCC and Wrigley Middle East companies were integrated as one Mars business operating in the GCC”.
“The integration resulted in the Mars Dubai office becoming the regional hub for Mars Wrigley,” he said. The Dubai company now employs more than 400 people.
“We have a lot to be proud of,” said Mr Chabara. “We’ve got great scale in the UAE and some incredibly strong brands – five are placed within the top 10 confectionery brands in the country – Galaxy, Snickers, Bounty & M&M’s in chocolate and Extra in gum. We have a leading presence in most retail outlets across the UAE.”
The company was advised on the share purchase by law firm Clyde & Co.