UAE’s Global Investment acquires 30% stake in Eastern Company
Updated 9/4/2023 7:20:00 AM
Arab Finance: UAE-based Global Investment Holding has signed a $625 million, equivalent to EGP 19.337 billion, deal to acquire a 30% stake in Eastern Company, according to a statement on September 3rd.
Moreover, Global Investment will also provide $150 million to Eastern Company to purchase tobacco materials needed for production.
Under the deal, the Chemical Industries Holding Company (CIHC) will keep a 20.9% stake in Eastern Company.
Commenting on the deal, HC Securities and Investment said that the deal implies a value for Eastern Company of EGP 28.9 per share, noting that it indicates a price-earnings ratio (PER) of 9.09 times for fiscal year (FY) 2022/2023 estimates, as per an emailed press release.
“Based on the shareholder agreement of UTC signed by Eastern Company and UTC shareholders, if a foreign company acquires 10% of Eastern Company, the shareholders of UTC will have the right to acquire Eastern Company’s 24% stake in UTC at the stake nominal value in addition to $108 million,” it added.
The deal comes within the framework of the state’s initial public offering (IPO) program to sell stakes in state-owned companies to strategic investors.
It is worth mentioning that Eastern Company reportedly increased its cigarette production by 15%, along with its decision to distribute an additional amount of cigarettes daily to meet the local market’s demand.
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