ADQ, an Abu Dhabi-based investment and holding company, and Adnec has announced the signing of definitive agreements for the strategic acquisition of a 40.5% stake in Egypt-based Talaat Moustafa Group Holding’s hospitality arm Icon Group through a capital increase. 

 

As per the deal, both ADQ and Adnec will invest through a special purpose vehicle, with a 49% equity ownership by ADQ and the rest 51% by Adnec.

 

Icon is a leading player in Egypt’s luxury and upscale hospitality market, with a track record of building and owning some of the most celebrated luxury hotels in Egypt. 

 

The group owns four operational hotels - Four Seasons Cairo at Nile Plaza, Kempinski Nile Hotel Cairo, Four Seasons Sharm El Sheikh and Four Seasons Alexandria at San Stefano - and has three hotels and luxury residential real estate assets currently under development, including the Four Seasons in Madinaty and Luxor and Radisson Collection in Marsa Alam, and one hotel under design, the Four Seasons at The Pyramids.

 

According to ADQ, the transaction represents a major foreign direct investment in Egypt and marks a strong vote of investor confidence in the Egyptian tourism and hospitality sector.

 

The strategic investment in TMG’s hospitality arm will be used partially to deleverage the existing debt of Icon, with the remaining used for the acquisition of a stake through Icon in the portfolio of seven luxury heritage hotels owned by the Egyptian government, for which definitive agreements have been signed. 

 

The seven hospitality assets include Marriott Cairo Omar Khayyam Zamalek, Marriott Mena House Cairo, Sofitel Winter Palace Luxor, Sofitel Legend Old Cataract Aswan, Steigenberger Cecil Hotel Alexandria, Steigenberger Hotel El Tahrir Cairo and Mövenpick Resort Aswan.

 

Post-transaction, Icon will have a combined portfolio of 15 luxury and upscale hospitality assets with a total of around 5,000 keys in prime locations including Cairo, Luxor, Aswan, Sharm El Sheikh and Alexandria. 

 

The acquired hotels in Egypt are managed by best-in-class operators and will continue to benefit from the synergies, resources and in-country expertise of TMG Holding.

 

With tourism high on the agenda of the Egyptian Government, the sector is anticipated to grow to more than 30 million tourists annually by 2028. 

 

Egypt currently has a limited supply of heritage hotels across the luxury and upscale segments to cater to the evolving preferences of a new demographic of travelers.

 

Adnec Managing Director and Group CEO Humaid Matar Al Dhaheri said: "The investment in Icon is an important strategic step for us as we deliver on our global expansion strategy and will provide Adnec Group and its portfolio companies with access to Egypt’s rapidly growing tourism market."

 

"It also reaffirms our commitment to enhance the hospitality and tourism platform. We will work closely with TMG Holding to enhance and grow ICON and create additional value for our shareholders," he stated.

 

TMG Holding CEO and Managing Director Hisham Talaat Moustafa said: "We are delighted to have ADQ and Adnec join us as strategic partners and shareholders in this landmark transaction and provide for an exciting outlook going forward."

 

"Through this partnership we will pursue substantial growth opportunities in Egypt’s tourism sector and beyond and will unlock further value for our shareholders," he added.

 

EFG Hermes is acting as the sole financial advisor to TMG Holding on the transaction.-TradeArabia News Service