Eastern Company: Acquisition by Global Investments Holding for $625 million
According to a report from Egypt Daily News, Global Investments Holding Ltd., based in the United Arab Emirates, has acquired a 30% stake in Egypt's largest tobacco producer, Eastern Company, for a sum of $625 million. As per the agreement, the chemical holding company will retain a 20.9% ownership in Eastern Company.
The signing ceremony was attended by the Prime Minister of Egypt, the Minister of Finance, and the Minister of State for Public Enterprises.
Global Investment Holdings Limited has agreed to acquire a 30% stake in East Company for a total price of $625 million (EGP 19.336 billion). As part of the agreement, the buyer will also provide $150 million for the procurement of tobacco raw materials necessary for production.
The Minister of State-Owned Enterprises state that the transaction confirms the government's commitment to expanding ownership and encouraging direct private investment in various sectors.
Earlier, the Egyptian government announced its intention to complete the sale of equity in Eastern Company, Egypt's largest tobacco producer, in the first half of 2024.
Prior to this new deal, the chemical industry holding company, which owns a 50.95% stake in Oriental Company, has received multiple offers from foreign investors to purchase up to 30% of its shares in the company. Sources indicate that negotiations are ongoing to select the most favorable offer.
Bidders in the competition include Japan Tobacco International (JTI), the majority stakeholder in the joint tobacco company held by Philip Morris International (PMI), and an investor from the Arabian Gulf region. Sources indicate that both JTI and the joint tobacco company have submitted bids in the range of around $700 million.
Oriental Tobacco Company has announced that its sales in the third quarter of 2022/23 have increased by 1 billion Egyptian pounds, reaching 14.6 billion Egyptian pounds, while sales in the third quarter of 2021/22 were 12.781 billion Egyptian pounds, marking a growth rate of 14%.
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