One of Egypt’s largest supermarket chains is reportedly in talks with Dubai retail giant for a potential sale of assets.
According to Gulf Business, sources close to the deal reveal that Dubai-based firm Majid Al Futtaim (MAF) is in the advanced stages of negotiations to buy the family-owned Mansour Group’s Metro chain. The due diligence process for the sale of the retail chain has been completed and only minor details need to be sorted out. The retail business of Metro chain and discount grocery store is estimated to be valued between USD 200 million to USD 300 million.
Mansour Group boasts a diversified business portfolio, including the largest distribution of General Motors cars in Egypt. The business group also holds a stake in French bank Credit Agricole (in Egypt) and also owns the McDonald’s Corp chain in Egypt. With more than 40 outlets in 10 cities, Metro is one of Egypt’s largest supermarket chains. Similarly, Kheir Zaman is an immensely popular discount grocery store, with over 2,000 employees and 30 stores across Egypt. The group was eager to sell Metro and Kheir Zaman since last year.
The deal is being viewed as part of MAF’s strategy to benefit from regional expansion in fast growing markets. MAF is also the sole franchisee of French hypermarket chain Carrefour in the Middle East. MAF, which operates several malls across the Middle East and North Africa, has been eyeing an expansion in Egypt through acquisitions.
In the aftermath of Arab Spring, Egypt has swayed regional investors because of attractive valuations. Some of the largest business groups in Gulf countries have expressed their keenness in expanding their footprint in the region’s most populous Arab country. Despite the political and economic turmoil, Egypt’s banking and retail sectors offer a lucrative growth opportunity for cash-rich Gulf investors.