Dr. Abdulraouf M. Mannaa, Managing Director of Savola Group, announced that the Savola Group signed an agreement on 17th Oct. 2011 to acquire 78% ownership stake in Al-Malika & Al-Farasha companies specialized in Pasta in Egypt through its subsidiary Savola Foods Company (90% owned by Savola) at price of EGP 556.5 Million. This would be a new category in the area of wheat and flour based products, which are considered as adjacent and complementary to Savola s activities in the Edible oil and Sugar sectors. Its worth mentioning that these two companies are engaged in the field of manufacturing and marketing Pasta inside and outside Egypt, and have two factories in Egypt with production capacity of 120,000 Tons per annum, with a market share of 30%. It is worth to note that the transaction will be self-financed.
It should be noted that financial due diligence has been conducted by PricewaterhouseCoopers (PwC) and the legal due diligence has been conducted by Baker & McKenzie, and that HC Securities & Investments was the financial advisor.
It is worth to note that this transaction will strengthen the Savola s strategy to focus on its Foods, Retail & Plastics businesses. Furthermore, this transaction will provide good opportunity to integrate the existing operations of Edible oils and Sugar in Egypt (through its subsidiaries Afia International and United Sugar Company). This will result in value addition through the optimal use of Savolas existing distribution network in Egypt, which will positively affect its consolidated revenue and profitability.
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