MAF inches closer to Egypt supermarket deal
Dubai, April 29, 2013
Dubai retail firm Majid Al Futtaim (MAF) is in advanced discussions to buy Egypt's largest supermarket chain from family-owned Mansour Group, two sources said on Monday.
A due diligence process for the purchase of Mansour Group's Metro chain and discount grocery store Kheir Zaman has been concluded, one source said, speaking on condition of anonymity as the matter is not public. The Mansour Group's retail business is worth an estimated $200 million to $300 million.
Both companies have agreed to go ahead with the deal and some minor details are now being cleared, the source said.
The transaction shows the growing interest of Gulf companies in expanding into the region's most populous Arab country at a time when valuations are low due to the economic instability following the Arab Spring.
Mansour Group, also the largest distributor of General Motors cars in Egypt, has been looking to sell Metro and Kheir Zaman since last year. MAF chief executive Iyad Malas told Reuters in January that the deal was in the due diligence stage.
MAF, which is the sole franchisee of French hypermarket chain Carrefour in the Middle East, declined to comment on the report. Mansour Group was not immediately available to comment.
The Egyptian group is also a shareholder in French bank Credit Agricole's Egyptian business and runs McDonald's Corp's chain in Egypt among its other businesses.
Metro is one of Egypt's largest supermarket chains with more than 40 outlets in 10 cities. Kheir Zaman, a discount grocery store, has over 2,000 employees and 30 stores throughout the country.
Unlisted MAF, which also runs nearly a dozen malls across the Middle East and North Africa, is keen on expanding in Egypt through acquisitions, according to one Dubai-based banking source who is aware of the discussions. Carrefour Egypt, which has 13 outlets across the country, is a joint venture between MAF and the French retail group.
Cash-rich Gulf investors remain interested in increasing their presence in Egypt despite the political turmoil in the country. In the banking sector, Gulf groups have taken advantage of a retreat by European banks in the aftermath of the financial crisis.
BNP Paribas has sold its Egyptian arm for $500 million to Dubai lender Emirates NBD. And Societe Generale also agreed to sell its majority stake in National Societe Generale Bank to Qatar National Bank for $2 billion.-Reuters