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Dubai buys British engineering firm

The Dubai state-owned investment company, Dubai International Capital (DIC) has announced that it is to buy British engineering company Doncasters Group for £700 million.

The deal marks an increasing interest by the Dubai government in European and US-based investments, following the acquisition of stakes in companies like DaimlerChrysler and Tussauds Group, the operators of Madame Tussauds in London.

Record levels of oil revenue have prompted many Middle Eastern investors to diversify their investment portfolios, hoping to capitalize on their current purchasing ability.

DIC CEO Sameer al-Ansari said: "This acquisition allows DIC to move forward with its investment strategy to build a diverse portfolio of direct investments across various industries around the world."

Doncasters is based both in the US and Europe, with nine plants in America owned and operated by the company.

The deal, between the Royal Bank of Scotland's private equity investments unit and DIC, had been agreed back in March, but Dubai was forced to wait for clearance from the US following state security concerns.

However, industry experts say that such issues are unlikely to deter oil-rich countries from making further investments in western companies in the future.