MNHD targets merger with or acquisition of SODIC

Mohamed Samir
3 Min Read

The board of directors (BoD) of Madinet Nasr for Housing and Development (MNHD) announced on Wednesday that it has given approval to start negotiations for a potential merger with or acquisition of Six of October Development and Investment (SODIC) in an attempt to create one of the largest players in the real estate sector.

Moreover, the discussions with SODIC’s BoD aims to examine the available options, valuations for both entities, and conducting due diligence.

According to an MNHD statement, the proposed merger/acquisition would bring together MNHD’s large land bank of over 9m sqm, and its strong sales of EGP 5bn in 2017 with SODIC’s premium brand name with sales of EGP 5.5bn in 2017, MNHD said.

Furthermore, MNHD announced that the transaction would expand both firms’ client base, adding that if the transaction goes through, it would create one of the largest players in the Egyptian real estate sector.

MNHD has tapped EFG Hermes to advise on the transaction, while Zaki Hashem & Partners are serving as legal counsel, according to the statement.

SODIC and MNHD would be a perfect match that complements one another at several levels, according to a research note evaluating the possible merger/acquisition by Beltone Financial.

Beltone believes that through combining MNHD’s massive residual land bank with SODIC’s robust brand equity that has a solid track record for developing fully integrated communities, together, the two entities would create an aggregate residual/unutilised land bank of 12m sqm.

Moreover, the new entity would have a wider geographical spread through MNHD’s prime project locations in east Cairo with SODIC’s strong presence in west Cairo and the North Coast.

The note concludes that by joining forces, aggregate contracted sales for both entities will likely cross the EGP 14bn mark, whereby SODIC and MNHD have a contracted sales target of EGP 8.7bn and EGP 5.5bn in 2018 respectively. This target should be the highest among key listed developers such as Talaat Moustafa Group Holding (EGP 13bn), Emaar (EGP 13bn), and Palm Hills (EGP 12bn).

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Mohamed Samir Khedr is an economic and political journalist, analyst, and editor specializing in geopolitical conflicts in the Middle East, Africa, and the Eastern Mediterranean. For the past decade, he has covered Egypt's and the MENA region's financial, business, and geopolitical updates. Currently, he is the Executive Editor of the Daily News Egypt, where he leads a team of journalists in producing high-quality, in-depth reporting and analysis on the region's most pressing issues. His work has been featured in leading international publications. Samir is a highly respected expert on the Middle East and Africa, and his insights are regularly sought by policymakers, academics, and business leaders. He is a passionate advocate for independent journalism and a strong believer in the power of storytelling to inform and inspire. Twitter: LinkedIn:
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