Abu Dhabi is making its foray into the auction industry.
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ADQ, an Abu Dhabi-based sovereign wealth fund, has struck a deal to buy a minority stake worth $1 billion in Sotheby’s, Bloomberg reported on Friday. Under the “definitive agreement,” French telecom tycoon Patrick Drahi, who bought the auction house in 2019 for $2.7 billion, will also invest additional money into the company and remain a majority shareholder. The transaction is expected to close by the end of this year.
“Our investment underscores our firm belief in the enduring value of Sotheby’s brand, market-leading platform, and the ability of its management to execute on their growth agenda,” said Hamad Al Hammadi, deputy group chief executive officer of ADQ, in a press release.
The partnership is another sign that Sotheby’s is planning for growth. In June, the auction house announced that it would move its Paris headquarters to 83 Rue du Faubourg Saint-Honoré, three blocks from its current outpost. The forthcoming relocation is scheduled for mid-October and coincides with the business’s greater expansion plans.
“This marquee investment will support Sotheby’s in delivering its ambitious growth agenda while accelerating its expansion into new markets, including establishing an even more robust presence in the Middle East, as Abu Dhabi continues to strengthen its arts and culture offering domestically,” the auction house wrote in the release.
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Sotheby’s has previously announced it would be moving two of its other locations as well. Last month, the company opened the doors to its 24,000-square-foot flagship in Hong Kong ’s central business district. Next year, the auction house will transplant its New York exhibition space to the Whitney Museum of American Art’s Marcel Breuer building on Madison Avenue, which it acquired in a $100 million deal .
“The additional capital and investment expertise will enable us to accelerate our strategic initiatives, expand our commitment to excellence in the art and luxury markets, and continue to innovate to better serve our clients around the world,” added Sotheby’s CEO Charles Stewart.
In June, S&P Global Ratings dropped Sotheby’s credit rating from a B to a B-. The recent downgrade was driven by a 22 percent decrease in revenue posted in the first quarter, in addition to a rise in exhibition costs and job cuts. If the auction house’s performance doesn’t improve this year, its rating could plummet even further.
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