(Bloomberg) --

A United Arab Emirates firm controlled by the country’s national security adviser has bought a 50% stake in a Turkish company with links to President Recep Tayyip Erdogan, marking the first major deal between the countries since a thawing of relations. 

A unit of Abu Dhabi’s International Holding Co. acquired the stake in renewable energy firm Kalyon Enerji Yatirimlari AS for 1.8 billion dirhams ($490 million). IHC is the UAE’s most valuable listed company and is controlled by the Royal Group, a conglomerate that lists Sheikh Tahnoon bin Zayed al Nahyan -- the UAE’s national security adviser and brother to the president -- as chairman.

The firm’s expansion in Turkey could pave the way for a flurry of deals between the two countries as wealth funds in the oil-rich capital of the UAE scout for targets for billions of dollars in investments. The deal also provides further evidence of a turnaround in ties between two countries that had been at loggerheads for much of the past decade over everything from Islamist movements to the conflicts in Syria and Libya.

An easing of relations could mark a revival of an investment pipeline that sputtered amid longstanding tensions stemming from Turkey’s support for the Muslim Brotherhood, an Islamist group banned in the UAE. Relations reached a nadir in 2016 when Turkish state media accused the UAE of supporting a coup attempt against Erdogan. 

Signed Deals

In November, Turkey and the UAE signed accords for billions of dollars of investments, including in technology and energy, after talks between Erdogan and Sheikh Mohammed bin Zayed al Nahyan, who was the Abu Dhabi crown prince at the time and has since become the president of the UAE.

In June, Abu Dhabi wealth fund ADQ bought Birgi Mefar, a small Turkish pharmaceutical firm. The fund, with an estimated $110 billion in assets, is considering spending as much as $1 billion on health-care and fintech targets, Bloomberg has reported.

IHC has investments ranging from Elon Musk’s SpaceX to a local fishery company. Shares in the firm have soared 129% this year, leading a 20% gain on the FTSE ADX General Index and putting it among the top ten performing equity benchmarks in the world this year. 

Istanbul-based Kalyon Enerji is a closely held unit of Kalyon Holding AS, one of the groups that have drawn severe criticism from the main opposition leader Kemal Kilicdaroglu over securing several large contract from the Erdogan’s government including $11 billion Istanbul Airport, one of the largest in the world.

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