M&A WATCH- Talks that could have seen Naguib Sawiris acquire City Gate from developer Qatari Diar have collapsed after the two failed to land necessary approvals within an agreed timeframe, Orascom Investment Holding said in a disclosure (pdf) yesterday. Sources said earlier this year that OIH Chairman Naguib Sawiris had agreed in principle with Qatari Diar to acquire a 60% stake in the project through his real estate business Ora Developers, rather than OIH. The two sides were waiting on the New Urban Communities Authority (NUCA) to approve a deadline extension for the project beyond 2021, which sources said last month was contingent on the acquisition going ahead. The project is owned by Qatari Diar subsidiary East Gate Developments.

Back to the drawing board for Diar: Diar has long sought an exit strategy from the New Cairo development — which it says is now valued at north of EGP 32 bn — after consistently failing to deliver on construction targets, which it had blamed on equipment theft, vandalism and worker intimidation by armed groups. The Qatari developer has tried to terminate contracts, return customer installments and even renegotiate contracts to reel themselves out of the onslaught of lawsuits from City Gate clients. The agreement with Sawiris would have seen the two companies forming a partnership to develop the project, and Diar paying a EGP 1.25 bn fine to NUCA for the delay in completing the project.