Abu Dhabi Development Holding's Strategic Investment in Egyptian Companies

In a recent development, Abu Dhabi Development Holding Company, the sovereign entity of the United Arab Emirates (UAE), has successfully concluded a significant transaction with the Egyptian Sovereign Fund.

According to a report by Fatma Salah from Daily News Egypt, the deal was finalized on Monday (30/10), marking a substantial investment by the UAE in the Egyptian market.

The transaction involves the acquisition of stakes in three prominent Egyptian state-owned companies, namely Ethydco, Al-Hefnawi, and EILAB, all of which are part of the pre-offering fund portfolio managed by the Egyptian Sovereign Fund.

This deal, estimated to be valued at $800 million, was entirely paid by the buyer, as disclosed by informed sources.

Legal advisory services for the buyer, Abu Dhabi Development Holding Company, were provided by Ma'tok Bisayoni and Hanawi, while Baker McKenzie represented the seller, the Egyptian Sovereign Fund.

The specifics of the acquisition include a 25% stake in Al-Hefnawi, a 30% stake in Ethydco, and a 35% stake in EILAB, an Egyptian company specializing in gasoline and alkyl pipelines.

These three companies are part of a larger group of seven state-owned entities featured in the pre-offering fund portfolio overseen by the Egyptian Sovereign Fund.

This portfolio encompasses companies like Ethydco, EILAB, Al-Hefnawi, Egypt for Trade Technology, Future for Urban Development, Egypt Life Insurance, and Al-Saleha for Investment.

The primary objective behind the creation of the pre-offering fund was to attract strategic investors who would acquire stakes in these state-owned enterprises, thereby enhancing their value before their eventual listing on the stock market.

It is worth noting that the Egyptian government had previously announced its plans to divest a portion of its assets, with a combined estimated value of up to $1.9 billion.

This recent deal with Abu Dhabi Development Holding Company is a significant step toward achieving that goal.