(Bloomberg) — An Abu Dhabi wealth fund is snapping up stakes in key Egyptian companies, including the country’s largest listed bank, as part of efforts to shore up the North African nation’s economy.
ADQ said it’s buying into Commercial International Bank, Fawry for Banking & Payment Technology Services SAE, Alexandria Container & Cargo Handling Company, Misr Fertilizers Production Company and Abu Qir Fertilizers & Chemical Industries.
The fund didn’t specify how much it will spend, but Bloomberg has previously reported ADQ plans to invest about $2 billion in Egypt, including a stake of about 18% in Commercial International Bank. The Egyptian bourse reported block trades worth $1.82 billion in the five firms on Tuesday, without disclosing the buyer’s identity.
Such funding is welcome for Egypt, where the economy is being put under increasing pressure from the shockwaves of Russia’s invasion of Ukraine. The central bank held a special policy meeting in March and hiked interest rates for the first time since 2017, and allowed the currency to weaken sharply.
The United Arab Emirates, of which Abu Dhabi is a part, is investing after Egypt expressed concerns over food security, a person familiar with the Gulf nation’s thinking said in March. Abu Dhabi sees this as a core issue for President Abdel-Fattah El-Sisi, the person said.
The UAE supported El-Sisi’s overthrow of an Islamist president who came to power following the Arab Spring uprisings a decade ago.
Egypt and the UAE set up a $20 billion joint strategic platform in 2019 to invest in a range of sectors and assets. It’s run through Egypt’s sovereign wealth fund and ADQ, which is chaired by Sheikh Tahnoon Bin Zayed Al Nahyan — a brother of the UAE’s de facto ruler and the country’s national security adviser.
“The recent transactions are a testament to our long-term commitment to elevate our investment partnership with Egypt and continue deploying capital in projects of commercial importance,” ADQ Chief Executive Officer Mohamed Hassan Alsuwaidi said on Wednesday.
ADQ last year bought an Egyptian pharmaceuticals company from Bausch Health Cos., while also investing in a UAE supermarket chain expanding in the North African country. Aldar Properties PJSC, backed by Alpha Dhabi Holding PJSC, meanwhile agreed to buy an Egyptian developer known as Sodic.
Earlier this year, First Abu Dhabi Bank PJSC offered to buy a majority stake in EFG Hermes, valuing the firm at $1.2 billion, in what’s likely to be the biggest acquisition yet in Egypt by the UAE’s largest lender.
(Updates with details)
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