Dubai firm buys Landmark Aviation

A Tempe-based aircraft maintenance company has become a target for acquisition by an oil-rich Arab emirate that has been a focus of political concerns over national security.

Dubai Aerospace Enterprise Ltd. said Monday it has signed an agreement to buy Landmark Aviation, 1524 W. 14th St., Tempe, and Standard Aero Holdings, a Canadian company, for $1.8 billion from the Carlyle Group, a private equity firm based in Washington, D.C.

Landmark was formed in 2004 when Carlyle acquired the former Garrett Aviation from General Electric and merged it with two aviation maintenance companies that it already owned, Piedmont-Hawthorne and Associated Air Center.

Landmark provides maintenance, repair, fueling, catering and other services for business aircraft at 43 cities in North America, employing about 2,500 people. Among the company’s customers are Honeywell International and Airbus.

In addition to its headquarters in Tempe, Landmark operates a fueling, maintenance and charter business at Scottsdale Municipal Airport. The company has about 100 employees in the Valley.

The possibility of the state-owned Dubai company acquiring the aviation business has raised the specter of the same sort of political debate that arose when state-owned Dubai Ports World tried to buy six U.S. shipping facilities last summer.

That deal created such a public and Congressional outcry that the Dubai company was forced to divest the port operations. Also Congress has begun to rewrite the rules for foreign investment in the United States.

However, Sen. Charles Schumer (D-New York), a vocal critic of the ports deal, told Bloomberg News Service that the aviation acquisition is not likely to arouse the same national security concerns

“This purchase is not as much of a security risk as Dubai Ports World,” he said in a statement. “If a thorough ... review is done and necessary safeguards are taken, the deal is unlikely to have problems in Congress.”

The transaction is subject to review by the Committee on Foreign Investment in the United States, a group led by Treasury Secretary Henry Paulson that has the task of assuring that foreign investments don’t jeopardize national security.

A source familiar with the deal who asked to remain anonymous said the parties in the transaction are ready to proceed with the regulatory reviews.

“The view we have now is that everybody wants to see the process work,” he said.

That source said Dubai Aerospace plans to sell off Landmark’s fueling operations if the deal is approved because the Dubai company wants to concentrate on maintenance and repair.

Dubai Aerospace was created in 2006 in an effort to diversify the economy of the wealthy emirate by building a global aviation business in aircraft manufacturing, services, airport operations and education.

Dubai is part of the United Arab Emirates, located on the Persian Gulf, a nation that has evoked mixed feeling related to terrorism.

Investigations concluded that Emirate banks were used in financing the 9/11 attacks, and several of the 9/11 plotters were from the Emirates. But the Bush administration has said UAE government officials have cooperated in the war against terrorism.