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UAE company buys 30% stake in Egyptian tobacco maker

Global Investments will provide $150 million to purchase the necessary tobacco materials for manufacturing Unsplash.com
Global Investments will provide $150 million to purchase the necessary tobacco materials for manufacturing

The UAE’s Global Investments Holding has acquired a 30 percent stake in Eastern Company, Egypt’s largest tobacco producer, for $625 million.

The sale is part of the Egyptian government’s programme of privatising state-owned assets.

Chemical Industries Holding Company, which held 50.95 percent of Eastern’s shares, last month announced that it had received offers from foreign investors to buy up to half of its shares.

Following the deal, Chemical Industries’ stake will fall to 20.9 percent, Daily News Egypt reported. The government had sold 4.5 percent of Eastern Company on the Egyptian stock exchange in 2019.

As part of the new deal, Global Investments will provide $150 million to purchase the necessary tobacco materials for manufacturing.

The Egyptian government expects to finalise the sale by the first half of 2024.

Eastern Company’s sales rose by 14 percent to EGP14.6 billion ($470 million) in the third quarter of 2022/23, compared to EGP12.8 billion a year ago. Total revenues grew to EGP54.83 billion in Q 32022/23, compared to EGP51.47 billion in Q3 2021/22.

Egypt plans to raise $5 billion by listing power plants and state-owned companies from October 2023 until the end of June 2024.

The government aims to sell stakes in the Siemens Beni Suef power plant, Gabal El-Zeit wind power plant and Zafarana wind farm, in addition to Safi and Watanya, companies owned by the military, Ahram Online reported, citing a cabinet report on the government’s initial public offering programme.

The state has collected $5 billion by offering stakes in 13 companies between March 2022 and July 2023.

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