(Bloomberg) — Abu Dhabi’s sovereign wealth fund has agreed to buy a 30% stake in Domestic & General Group Ltd., the U.K. appliance warranty provider owned by CVC Capital Partners, people with knowledge of the matter said.

The deal with the Abu Dhabi Investment Authority could be announced as soon as Wednesday in London, according to the people, who asked not to be identified because the information is private. The transaction values Domestic & General, which is used by one-third of U.K. households, at just over 1 billion pounds ($1.25 billion), the people said.

CVC is opting for a deal with ADIA, one of the world’s largest sovereign wealth funds, instead of an initial public offering of the business due to market uncertainty, one of the people said. The transaction is expected to close by the end of the year, according to the person.

Sovereign wealth funds have been stepping up direct investments as they seek to generate returns in a low interest rate environment.

Nestle Skincare

ADIA has teamed up with EQT Partners to buy Nestle SA’s skincare for about $10 billion. The fund also was planning to buy out Vornado Realty Trust’s 25% stake in a Manhattan office tower, a person familiar with the matter said in June.

ADIA doesn’t divulge its assets under management, but it has been estimated to have about $696 billion. That makes it the third-largest in the world, according to data from the Sovereign Wealth Fund Institute.

Domestic & General has 9 million customers in the U.K. and carries out 2.5 million appliance repairs yearly. It generates about 101 million pounds of underlying earnings before interest, taxes, depreciation and amortization and has annual revenue of 811 million pounds.

CVC first invested in Domestic & General, which has about 2,900 employees, in 2013, according to its website. The buyout firm will transfer its remaining 70% holding in the business to Fund VII, which it raised in 2017, one person said.

A representative for ADIA wasn’t immediately available to comment outside of regular business hours. A representative for CVC declined to comment.

–With assistance from Fion Li.