Mubadala Development Co., among Abu Dhabi's most active state investment vehicles, said Tuesday it bought half of Los Angeles-based Kor Hotel Group as it seeks to tap deeper into the global hospitality industry.
The investment is the latest effort by the oil-rich United Arab Emirates capital and its neighbor Dubai to team up with established hotel brands as they expand their domestic tourist industries and look for new sources of income abroad.
Mubadala and Kor said the agreement will lead to "aggressive global expansion" of Kor's Tides and Viceroy hotel brands, and boost the hotel operator's presence in the Middle East, North Africa and Asia.
The companies did not disclose financial terms of the deal.
Mubadala spokesman Richard Mintz said it would be premature to say which international locations the companies were targeting, although the deal includes plans for business and resort developments in Abu Dhabi by 2012. One site under consideration in the capital is Suwa Island, which Mubadala is developing as a central business district, Mintz said.
Mubadala has acquired stakes in a wide range of companies in recent years, including sports car maker Ferrari S.p.A. and private equity firm Carlyle Group. It said the Kor deal is its first direct investment in the hospitality industry.
However, the company and state-owned firms in Dubai have been actively pursuing other hotel partnerships. Mubadala and casino operator MGM Mirage Inc. last year announced plans to build a US$3 billion non-gambling resort in Abu Dhabi.
Meanwhile, Dubai state-owned developer Nakheel and hotel operator Kerzner International plan to open a US$1.5 billion resort Wednesday on a man-made island off the city's coast. Nakheel has also acquired a number of prominent hotels, such as New York's Mandarin Oriental and Miami's Fontainebleau.
Nakheel parent, Dubai World, also owns a stake in MGM Mirage and is helping build a massive multibillion-dollar casino complex on the Las Vegas Strip.
Kor was founded in 1999. The privately held company operates or is developing 19 hotels and resorts in the U.S., Mexico, Canada, the Caribbean and Asia.
