Majid Al Futtaim eyes Egypt supermarket chain
Dubai, December 23, 2012
Dubai's Majid Al Futtaim (MAF), is in talks with Egypt's Mansour Group, owned by billionaire Mohammed Mansour, to buy its supermarket business in a deal valued at $200 million to $300 million, three sources aware of the discussions said.
Mansour Group, also the largest distributor of General Motors cars in Egypt, is aiming to sell supermarket chain Metro and discount grocery store Kheir Zaman, the sources said, speaking on condition of anonymity as the matter is not public.
The ongoing discussions signal increased appetite by Gulf-based firms to expand their presence in the most populous Arab state at a time when valuations are low due to the political strife in the North African country.
Gulf banks have bought assets from their European counterparts in Egypt but the interest in Mansour Group's supermarket business shows the focus may now be spreading to other sectors such as retail where growth prospects are seen promising in the longer term.
MAF is the sole franchisee of French hypermarket chain Carrefour in the Middle East.
Due diligence on the deal is currently under way and a decision could be taken as early as January, one of the sources said.
MAF Group declined to comment on the report. Mansour Group was not available for immediate comment.
Metro is Egypt's largest supermarket chain with more than 40 outlets in 10 cities. Kheir Zaman, a discount grocery store, has over 2,000 employees and 30 stores throughout the country.
Unlisted MAF, the franchisee for Carrefour hypermarkets in 19 countries and operator of nearly a dozen malls across the Mena, is keen on expanding in Egypt through acquisitions, according to one Dubai-based banking source who is aware of the discussions.
Carrefour Egypt, which has 13 outlets across the country, is a joint venture between MAF and the parent firm.
"As a regional investor, MAF would be more comfortable with the long-term prospects of Egypt than other foreign investors," the source said.
"The country has the largest population in the Arab world and expanding into consumer and retail space is a bet which is more likely to pay off. No matter what the shape of the economy, people still need to buy their groceries."
Despite the political turmoil in Egypt, cash-rich Gulf investors remain interested in raising their presence after last year's revolution while European banks looking to repair damaged balance sheets have been selling overseas units.
BNP Paribas agreed to sell its Egyptian arm for $500 million to Dubai lender Emirates NBD last week.
This month Societe Generale also agreed to sell its majority stake in National Societe Generale Bank to Qatar National Bank for $2 billion.
Mansour Group is also a stakeholder in French lender Credit Agricole's Egyptian business and runs McDonald's Corp's chain in Egypt among its other businesses.-Reuters
More Retail & Wholesale Stories
- Al Meera opens first 24/7 mall in Qatar
- Fijitsu scanners feature PaperStream
- LG launches new tablet in UAE
- Major jewellery expo opens in Dubai
- Weber renews Carrefour UAE partnership deal
- BMMI marks ‘Quality Month’
- Philips launches Airfryer XL
- Mena online spending to hit $15bn by 2015
- China Homelife Dubai kicks off
- Acer launches new EMEA brand campaign