Shearman & Sterling has represented Aabar Investments PJSC (Aabar), Abu Dhabi, in its joint venture project with MAN Ferrostaal Aktiengesellschaft, Daimler AG, Deutz AG, MTU Friedrichshafen GmbH and Rheinmetall Landsysteme GmbH in Algeria.
Aabar and the Algerian Ministries of Defence and Industry have concluded a memorandum of understanding with these five German companies on July 28, 2009 relating to the construction and operation of manufacturing plants for vehicles and engines in Algeria.
MAN Ferrostaal will carry out the entire project as general contractor. The company will modernize and build production facilities in Tiaret, Ain Smara and Oued Hamimine. After this, assembly equipment for the manufacture of vehicles and engines will be installed. It is envisaged that MAN Ferrostaal will subsequently manage their operation in joint venture companies which have yet to be established.
Daimler, Deutz, MTU Friedrichshafen and Rheinmetall are involved in the project as technology partners. They will provide licenses and proprietary rights, as well as parts sets for the manufacture of the vehicles and engines that are supplied from Germany. With the support of these partners, it is anticipated that the portion of local production in Algeria will be gradually increased over time -- for example, by identifying and using domestic suppliers. Specific products to be manufactured are the Sprinter, Unimog, G-Class and other all-wheel drive vehicles as well as engines.
The project represents the Algerian state's intention to develop its own capacity for the industrial manufacture of vehicles and engines over the long term and to create jobs.
Shearman & Sterling previously advised Aabar in several projects: in Germany inter alia in the acquisition of a 9.1% shareholding in Daimler AG, in the joint investment in Tesla Motors Inc. with Daimler AG, and in establishing an investment joint venture with Berndorf AG.
Shearman & Sterling attorneys involved in the transaction include partner Georg F. Thoma as well as associates Anja Zimmermann and Giuseppe Sferrazza (all Düsseldorf-M&A).