Kuwait asks firms to merge to weather crisis

Kuwaiti firms should consider mergers across sectors to weather the global financial crisis, news agency Kuna quoted the Gulf state's central bank governor as saying.

Mergers are "an option whose necessity has risen as a result of the aftermath of the global financial crisis," Sheikh Salem Abdul-Aziz Al Sabah told Kuna after a meeting of a task group to tackle the impact of the global crisis. He said firms should look seriously at opportunities to restructure themselves including mergers across sectors and borders.

The task group urged the government and parliament to amend legislation and issue new laws to make mergers easier, Sheikh Salem added. Kuwait's cabinet has approved a $7.26 billion fund to invest in the local bourse, which has been hit by the global financial crisis, media reports said yesterday.

It said the cabinet has approved a KWD2 bn government portfolio to invest in the stock market.

Last month the cabinet asked its investment arm the Kuwait Investment Authority (KIA) to set up a fund to invest in the bourse to shore up confidence.

Kuwait did not officially reveal the size of the fund, but some local newspapers said it would be in billions of dinars. The KIA is a major shareholder in many Kuwaiti companies including heavyweight Mobile Telecommunications Co.

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