In December 2007, Dow Chemical announced that Kuwait Inc.’s Kuwait Petroleum Corporation had agreed to buy a 50% stake in Dow Chemical’s plastics divisions for $9.5 billion, marking the biggest overseas investment by a Kuwaiti firm. Yet there’s nothing new, historically, about the government of Kuwait Inc. using the surplus capital it obtains from its oil revenues to purchase more stock in U.S.-based transnational corporations.
In the 1970s, for instance, the government of Kuwait Inc. began to play the New York stock market with the new wealth it gained from the sale of Kuwait’s crude oil to the transnational oil companies during that decade. In an article entitled “Power Broker: Kuwait’s Money Man Favors U.S. and Stocks In Placing Oil Billions,” which appeared in the Wall Street Journal on Oct. 9, 1979, the advisor to the Emir of Kuwait revealed that the government of Kuwait Inc. held “between $1 million and $50 million in the stock of most of the top 500 U.S. corporations.” By 1982, according to the book OPEC’s Investments And The International Financial System by Richard Mattione, the total value of the Kuwait Inc. government’s New York Stock Exchange holdings was $11 billion. By 1990, the total value of the chunks of U.S. corporate stock owned by the Kuwait Inc. government was between $15 billion and $20 billion. In the early 1980s, for instance, the government of Kuwait Inc. owned:
2.1 percent of all General Electric/NBC stock (788,500 shares), worth $52.8 million.
3.7 percent of all AT&T stock (1,744,200 shares), worth $91.4 million.
2.3 percent of all Procter & Gamble stock (788,300 shares), worth $55.6 million.
2.4 percent of all Philips Petroleum stock (1,268,200 shares), worth $59 million;
2.4 percent of all Conoco stock (1,050,400 shares), worth $59.5 million.
3.8 percent of all Atlantic Richfield stock (1,808,000 shares), worth $96.1 million.
2.5 percent of all Eastman Kodak stock (749,400 shares), worth $61.1 million.
2.1 percent of all Schlumberger stock (500,300 shares), worth $50.1 million.
2.1 percent of all Digital Equipment stock (546,300 shares), worth $51.1 million.
2.1 percent of all American Home Products stock (1,535,000 shares), worth $51.8 million.
Besides controlling the RCA/NBC television network and NBC news operation, the General Electric company that Kuwait Inc. partially owned in the early 1980s also was the U.S. company which received the second-largest amount of Pentagon military contracts in 1988--$6.9 billion worth of weapons production work. Another company that Kuwait Inc. partially owned in the early 1980s, AT&T, sponsored the Public Broadcasting Service’s MacNeil/Lehrer News program between 1983 and the early 1990s. A third company that Kuwait Inc. partially owned in the early 1980s, Procter & Gamble, influenced U.S. mass media programming by being the leading U.S. national advertiser in the late 1980s, spending $1.4 billion on advertising in 1987.
Next: Kuwait Inc.’s Special Influence in the U.S.A. Historically—Part 2
James and the Twenty-Seven Bicycles
8 years ago