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Consolidation in UAE cooling industry

mubadalaMubadala Development Co rejected bids from GDF Suez SA and Veolia Environnement SA (VIE) for its cooling business in favor of talks with National Central Cooling Co. (TABREED), three people with knowledge of the matter said.

The Abu Dhabi state-owned fund, which owns a 15 percent stake and convertible bonds in National Central, may complete a sale for about $300 million, the people said, asking not to be identified as the information isn’t public. The sale could be concluded within the next three weeks, one of the people said.

Consolidation in the industry is quickening as demand increases because of a construction boom in the United Arab Emirates. Dubai’s district cooling firm Empower, majority owned by Dubai Electricity & Water Authority, bought Dubai World unit Palm District Cooling for $500 million in January.

The Abu Dhabi fund received several bids for National Central, known as Tabreed, which provides air conditioning for buildings in the emirate, Bloomberg News reported Feb. 20. Veolia made the bid through its Dalkia unit, two people with knowledge of the matter said in February.

Tabreed provides air conditioning for buildings on Al Maryah Island, which is being developed by Mubadala as a new central business district in Abu Dhabi. It’s already home to a branch of health provider the Cleveland Clinic and the planned location of the emirate’s new financial center, the Abu Dhabi Global Market.

Representatives for Mubadala, Tabreed, GDF Suez and Veolia’s Dalkia unit didn’t immediately respond to requests for comment.-Bloomberg