Ahead of expectations, the UAE’s Global Investment Holding Company has acquired 30 percent of Egypt’s Eastern Company, according to an official cabinet statement.
Sources told local media last week that the Egyptian government expected to finalize the sale of a stake in Eastern Company, the largest tobacco producer in Egypt, by the first half of 2024.
Global Investment Holding purchased the 30 percent stake in Eastern Company for $625 million (LE 19.336 billion), with the agreement stipulating that the buyer would provide $150 million to purchase the tobacco materials needed for manufacturing.
Under the agreement, the Holding Company for Chemical Industries will retain a 20.9 percent stake in Eastern Company. Prior to the sale, the company owned 50.95 percent of Eastern Company.
The deal is an affirmation of the government’s determination to encourage direct private investment in various sectors and is in line with Egypt’s State Ownership Policy which looks to boost investment opportunities for the private sector, and activate the stock market, explained the statement.
The signing was witnessed by Prime Minister Mostafa Madbouly, Finance Minister Mohamed Maait, and Minister of Public Enterprises Sector Mahmoud Mostafa Kamal Esmat.
The Holding Company for Chemical Industries has previously received several offers from foreign investors to buy up to 30 percent of its share in the company, including offers from Japan Tobacco International (JTI), United Tobacco Company, which is majority-owned by Philip Morris International, and an investor from the Arab Gulf region.
Eastern Company recently announced that its sales increased by 14 percent to LE 14.6 billion in Q3 of 2022/2023, compared to LE 12.781 billion in Q3 2021/2022, with total revenues climbing to LE 54.827 billion in Q3 2022/2023, compared to LE 51.466 billion in Q3 2021/2022.