EGYPT— United Arab Emirates food and beverage group, Agthia is poised to take a majority stake in Egyptian snacks company Abu Auf Holding.
Agthia, majority-owned by state investor Abu Dhabi Development Holding Company (ADQ), plans to take a 60% interest in Abu Auf, subject to regulatory approval.
After completion of the deal, which is subject to regulatory conditions, the founders will hold 30% and TCV, an Egyptian private equity firm which invested in Abu Auf in 2019, will hold a 10% stake.
Abu Auf, located in New Cairo, manufactures a range of consumer products sold via the direct-to-consumer channel and through 200 retail outlets in Egypt, and three that recently opened in the United Arab Emirates. The business supplies markets in the Middle East, Asia, Europe and the US.
Financial terms were not disclosed for the stake in the Egyptian company, which generated revenue of AED236m (US$64.2million) in the year to 31 December and EBITDA of AED58million.
Alan Smith, the CEO of publicly-listed Agthia, which has been active in M&A in recent years, said Abu Auf “is an important strategic target for Agthia to boost growth in our snacking and healthy food verticals, as we continue to adopt a more consumer-centric business model”.
Agthia, which is owned by Abu Dhabi’s state holding company ADQ, has been on a deal-making spree in an effort to become the biggest food and beverage company in the region by 2025.
Its first-quarter net profit jumped almost 64 per cent on an annual basis as the company’s quarterly sales surpassed Dh1 billion (US$272.3 million) for the first time. Total assets were Dh6.6 billion (US$ 1.7 billion) as of March 31.
In May, Agthia announced expansion into Saudi Arabia with a greenfield investment worth Dh90m (US$24.5 million) that will be used to set up a manufacturing unit in the kingdom.
Last December, the company completed the acquisition of snacks maker BMB Group, and in September it acquired a 75.02 per cent stake in Egypt-based meat processor Ismailia Investments, also known as Atyab.
ADQ’s acquisitions in Egypt include buying US$1.85 billion worth of stakes in five listed companies in April. In May, the UAE’s state news agency said ADQ will allocate US$10 billion in investment for projects with Egypt and Jordan, including agriculture, pharmaceuticals, minerals, petrochemicals and textiles.
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