Abu Dhabi fund to acquire stake in Sotheby’s in $1 billion move

The deal, announced on Friday, will involve the acquisition of newly issued shares by ADQ, which will bolster Sotheby’s financial position and support its expansion plans.

French telecom magnate Patrick Drahi, who took ownership of Sotheby’s in 2019, will also contribute additional capital alongside ADQ, maintaining his position as the majority owner. The combined investment from Drahi and ADQ is expected to reach around $1 billion.

This strategic partnership comes as Sotheby’s parent company, Bidfair, faces significant financial challenges, with reported long-term debts of approximately $3.5 billion as of last year. In June, credit rating agency S&P downgraded the auction house’s credit rating from B to B minus, citing ongoing pressures on profitability.

The investment is seen as a timely boost for Sotheby’s, particularly as it seeks to strengthen its presence in the Middle East, a region where many of its prominent bidders and collectors are based. The partnership with ADQ will enable Sotheby’s to deliver on its ambitious growth plans and explore new markets.

“This marquee investment will support Sotheby’s in delivering its ambitious growth agenda while accelerating its expansion into new markets, including establishing an even more robust presence in the Middle East, as Abu Dhabi continues to strengthen its arts and culture offering domestically,” the statement from Sotheby’s read.

Hamad Al Hammadi, ADQ’s Deputy Group Chief Executive, expressed confidence in Sotheby’s future under this new partnership. “Our investment underscores our firm belief in the enduring value of Sotheby’s brand, market-leading platform, and the ability of its management to execute on their growth agenda,” Al Hammadi said. “We look forward to creating new collaboration opportunities with Sotheby’s and being a part of its journey,” he added.

ADQ’s investment in Sotheby’s is part of its broader strategy to enhance its global footprint. In recent months, ADQ has made significant moves across various sectors. In April, the fund announced its acquisition of a stake in Australia’s Plenary Group, marking its entry into the Asia-Pacific infrastructure market.

In the same month, ADQ consolidated its life sciences assets to create a new holding company focused on improving human health and longevity. Additionally, in February, ADQ led a consortium to invest $35 billion in major projects in Egypt, including acquiring development rights for the Ras El Hekma coastal region.

The investment agreement with Sotheby’s is currently pending customary approvals and is expected to be finalized by the end of the year. Charles Stewart, Sotheby’s Chief Executive, highlighted the benefits of this new capital injection, stating, “The additional capital and investment expertise will enable us to accelerate our strategic initiatives, expand our commitment to excellence in the art and luxury markets, and continue to innovate to better serve our clients around the world.”

As ADQ continues to diversify and expand its investments globally, this partnership with Sotheby’s represents a significant step in its strategy to enhance its influence in the arts and culture sector.