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Abu Dhabi's ADQ Makes Merger Offer to Abu Dhabi Aviation

General view of Abu Dhabi, United Arab Emirates, January 3, 2019. REUTERS/ Hamad I Mohammed/File Photo/File Photo
General view of Abu Dhabi, United Arab Emirates, January 3, 2019. REUTERS/ Hamad I Mohammed/File Photo/File Photo
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Abu Dhabi's ADQ Makes Merger Offer to Abu Dhabi Aviation

General view of Abu Dhabi, United Arab Emirates, January 3, 2019. REUTERS/ Hamad I Mohammed/File Photo/File Photo
General view of Abu Dhabi, United Arab Emirates, January 3, 2019. REUTERS/ Hamad I Mohammed/File Photo/File Photo

Abu Dhabi sovereign wealth fund ADQ said on Monday it had made an offer to take a controlling stake in Abu Dhabi Aviation and merge the helicopter operator with ADQ stakes in Etihad Engineering, AMMROC and GAL to create a "globally competitive aviation business" with about 9.4 billion dirhams ($2.56 billion) in assets.

ADA said in a stock exchange filing it would hold a board meeting on Wednesday to discuss the offer.

ADQ would own about 59% of ADA's entire issued share capital under the deal, ADQ said.

ADQ said it would combine ADA with its 100% shareholding in Etihad Engineering and Advanced Military Maintenance Repair and Overhaul Center (AMMROC) and with its 50% stake in Abu Dhabi-controlled aviation services firm GAL.

GAL is 50% owned by International Golden Group, the UAE military's leading supplier according to IGG's website.

It was not immediately clear how ADQ planned to merge an entity in which it does not have a controlling stake.

ADA, 30% owned by another Abu Dhabi wealth fund, Mubadala, would issue a convertible instrument to ADQ that would convert into roughly 652 million shares of ADA when the transaction closes, ADQ said in a statement.

The converted shares of ADA would be priced at 6.14 dirhams a share, implying an equity valuation of about 2.7 billion dirhams, ADQ said.

ADQ's Chief Executive Mohamed al-Suwaidi said in the statement that the deal would "further position Abu Dhabi as a world-leading center of aviation excellence" and create an industry "champion".

If ADA's board approves the transaction, it would be subject to shareholder and regulatory approvals, ADQ said.

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US Job Growth Surges in September, Unemployment Rate Falls to 4.1%

A woman enters a store next to a sign advertising job openings at Times Square in New York City, New York, US, August 6, 2021. REUTERS/Eduardo Munoz/File Photo
A woman enters a store next to a sign advertising job openings at Times Square in New York City, New York, US, August 6, 2021. REUTERS/Eduardo Munoz/File Photo
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US Job Growth Surges in September, Unemployment Rate Falls to 4.1%

A woman enters a store next to a sign advertising job openings at Times Square in New York City, New York, US, August 6, 2021. REUTERS/Eduardo Munoz/File Photo
A woman enters a store next to a sign advertising job openings at Times Square in New York City, New York, US, August 6, 2021. REUTERS/Eduardo Munoz/File Photo

US job growth accelerated in September and the unemployment slipped to 4.1%, further reducing the need for the Federal Reserve to maintain large interest rate cuts at its remaining two meetings this year.
Nonfarm payrolls increased by 254,000 jobs last month after rising by an upwardly revised 159,000 in August, the Labor Department's Bureau of Labor Statistics said in its closely watched employment report on Friday.
Economists polled by Reuters had forecast payrolls rising by 140,000 positions after advancing by a previously reported 142,000 in August.
The initial payrolls count for August has typically been revised higher over the past decade. Estimates for September's job gains ranged from 70,000 to 220,000.
The US labor market slowdown is being driven by tepid hiring against the backdrop of increased labor supply stemming mostly from a rise in immigration. Layoffs have remained low, which is underpinning the economy through solid consumer spending.
Average hourly earnings rose 0.4% after gaining 0.5% in August. Wages increased 4% year-on-year after climbing 3.9% in August.
The US unemployment rate dropped from 4.2% in August. It has jumped from 3.4% in April 2023, in part boosted by the 16-24 age cohort and rise in temporary layoffs during the annual automobile plant shutdowns in July.
The US Federal Reserve's policy setting committee kicked off its policy easing cycle with an unusually large half-percentage-point rate cut last month and Fed Chair Jerome Powell emphasized growing concerns over the health of the labor market.
While the labor market has taken a step back, annual benchmark revisions to national accounts data last week showed the economy in a much better shape than previously estimated, with upgrades to growth, income, savings and corporate profits.
This improved economic backdrop was acknowledged by Powell this week when he pushed back against investors' expectations for another half-percentage-point rate cut in November, saying “this is not a committee that feels like it is in a hurry to cut rates quickly.”
The Fed hiked rates by 525 basis points in 2022 and 2023, and delivered its first rate cut since 2020 last month. Its policy rate is currently set in the 4.75%-5.00% band.
Early on Friday, financial markets saw a roughly 71.5% chance of a quarter-point rate reduction in November, CME's FedWatch tool showed. The odds of a 50 basis points cut were around 28.5%.