EFG Hermes, the leading investment bank in Frontier and Emerging Markets (FEM), announced Saturday that it successfully concluded its advisory role to UAE investment firm Global Investment Holding Ltd on the $625m transaction, which involves the acquisition of a 30% stake in the Egyptian tobacco giant Eastern Company from Egypt’s state-owned Chemical Industries Holding Co. (CIHC). The deal was approved by the cabinet on 3 September 2023. EFG Hermes acted as the sole financial advisor to Global Investment Holding Ltd in the acquisition.
Maged El Ayouti, Managing Director and Deputy Head of Investment Banking at EFG Hermes, commented on the transaction: “We’re proud to be part of this landmark transaction, which has far-reaching positive implications for both Eastern Company as well as the broader economy. As one of the largest minority stake sales in Egypt’s history and one of the biggest FDI transactions into Egypt in the last several years, this deal reflects the continued investors’ appetite for acquiring stakes in leading Egyptian corporates, whether these are in defensive sectors or pursuit of high growth opportunities. The transaction is the latest in a series of successful executions we have completed in the M&A space over the last three years, exceeding $6.5bn in transaction value.”
Egypt’s largest tobacco product maker and distributor, Eastern Company’s product portfolio includes cigarettes, cigars, pipe tobacco, and molasses tobacco, as well as other related products such as cigarettes’ filter rods and homogenized tobacco. It has been a pivotal part of Egypt’s economic fabric for decades, retaining a consistent market share of 70%.
The deal is one of the major M&As EFG Hermes has advised on which also includes the sale of a 55% stake of Vodafone Egypt to Vodacom for a total consideration of €2.7bn; the sale of a 60% stake in Egypt’s health food company Abu Auf by Emirati food and beverage major Agthia; the 100% indirect stake acquisition in confectionery and healthy foods maker BMB Group by Agthia; the 85.52% stake sale of Egyptian real estate giant SODIC to Aldar Properties in a deal valued at $388m; Abu Dhabi Ports Group’ (AD Ports) acquisition of a 70% stake in Egypt’s Transmar in a deal valued at $140m; Saudi Arabia’s Public Investment Fund’s acquisition of a 33.4% stake in consumer electronics and household appliances retailer BTECH for a consideration of $150m; the sale of 100% of Bank Audi Egypt to First Abu Dhabi Bank; as well concluding a $530m deal for Dubai-based Gulf Islamic Investments to acquire a 51% stake in Saudi’s Al Meswak Clinics.
EFG Hermes also acted as the sole broker for Global Investment Holding Ltd, executing the transaction.