Mubadala Development, a principal investment company wholly owned by the Government of Abu Dhabi, has acquired 35 per cent of the equity of Piaggio Aero.

The transaction is founded on a shared belief by the two parties that the business aviation segment will continue to expand significantly over the foreseeable future.

Said Piero Ferrari, chairman of Piaggio Aero: "We have had extraordinary success in both the European and North American business aviation markets.

"This deal places us in a position to further grow our position in those markets whilst beginning to explore new markets, including the Middle East, Far East and South America - each of which offers high potential for sales."

Mubadala Development's investment involves the purchase of existing shares and new shares. Piaggio Aero's primary shareholders are the Ferrari and di Mase families and, as a result of the transaction, they

will now hold 55 per cent of the share capital of the company. Together with Mubadala's 35 per cent stake, this accounts for 90 per cent of the share capital of the company. The other 10 percent is held by a mixture of banks and other shareholders.

As part of the transaction, Mubadala will receive three board seats of Piaggio out of a total of seven, including the post of vice-chairman.

Mubadala will also receive one of the three seats on the company's executive management committee. Financial terms of the transaction were not disclosed.

Piaggio Aero has shipped a combined total of almost 110 of its Avanti and Avanti II aeroplanes and it plans to deliver 24 of its P180 Avanti IIs in 2006.