UAE’s Global Investment Holding Acquires 30% Stake in Egyptian Company
Part of government’s plan to divest its stake; tobacco manufacturer Eastern Company has over 70 percent market share in the country.
A UAE company, identified as Global Investment Holding, has acquired 30 percent stake in Egypt’s tobacco manufacturer Eastern Company for $625 million.
According to an official cabinet statement on Facebook, the agreement with Global Investment Holding includes that the buyer would provide $150 million to purchase the tobacco and other raw materials needed for manufacturing. It wasn’t clear whether this was an additional amount to the $625 million purchase price.
UAE’s Global Investment Holding acquires 30% of Eastern Company
The statement added that this deal is part of the government’s efforts to increase private investments in various sectors.
State-run Chemical Industries, the holding company of Eastern Company, will retain a 20.9 per cent stake. It earlier owned 50.95 per cent of the company.
Egyptian Prime Minister Mostafa Madbouly, Finance Minister Mohamed Maait, and Minister of Public Enterprises Sector Mahmoud Mostafa Kamal Esmat were present at the signing ceremony.
The deal is part of Egyptian government’s efforts to encourage direct private investment in various sectors and in line with Egypt’s State Ownership Policy which looks to boost investment opportunities for the private sector and activate the stock market through expanding the ownership base.
Local media said Chemical Industries had received several offers from foreign investors to buy stake in the company, including Japan Tobacco International (JTI) and United Tobacco Company, which is majority-owned by Philip Morris International.
Egypt had recently promised the International Monetary Fund (IMF) it would roll back the state’s involvement in the economy and allow private companies a much greater role as part of a $3 billion, 46-month financial support package signed in December.
Eastern Company, which has over 70 per cent of market share in Egypt, reported a net profit of EGP5.29 billion ($171.18 million), up 24 per cent year on year from EGP4.25 billion ($137.53 million).
Source : Arabian News
