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Sunday, 9 February 2020

Egyptian Competition Authority probes Cairo 3A’s bid to acquire Starch and Glucose Company

M&A WATCH- ECA probing Cairo 3A’s bid to acquire majority stake in Starch and Glucose Company: The Egyptian Competition Authority (ECA) has asked for details on a bid by commodities and poultry trader Cairo 3A to acquire a major stake in the Egyptian Starch and Glucose Company’s (ESGC) before greenlighting the transaction, the local press reports, citing government sources. The acquisition would give Cairo 3A a larger share of the market, but would not surpass ECA limits, the sources added. A meeting will be held with company and ECA executives to weigh the potential negative effects on competition, sources close to the transaction said.

The news comes as the ECA continues to lobby for the legal authority to probe any M&A worth more than EGP 100 mn. The authority most recently said on Thursday that it objected to a proposed (and as-yet undisclosed) merger of Alameda Healthcare and Cleopatra Hospitals Group.

Background: Cairo 3A is moving ahead to acquire the entirety of Egyptian International Tourism Projects Company’s (Americana Egypt) 23.2% stake, Americana Egypt’s parent company Americana Group’s 41% stake, and Cairo Poultry’s 27.3% share. The company offered to buy the combined 45.8 mn shares for EGP 8.99-10.18 apiece, valuing the 91.5% stake at EGP 450-510 mn. All three major shareholders’ boards of directors accepted the offers shortly after Cairo 3A submitted it last week. Cairo 3A said it will conduct due diligence, which will be completed by 9 April, then make a mandatory tender offer by 12 April.

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