Mubasher: Abu Dhabi-based investment and holding firm ADQ and ADNEC Group inked definitive agreements to acquire a 40.50% stake in Talaat Moustafa Group Holding Company (TMG Holding) hospitality arm, ICON, through a capital increase.
The two UAE parties will invest through a special purpose vehicle, with 49% ownership by ADQ and 51% shareholding by ADNEC, according to a press release.
The joint deal marks a major foreign direct investment (FDI) in Egypt, with the tourism sector expected to exceed 30 million tourists annually by 2028.
Part of ADQ and ADNEC’s investment will be used to lower ICON's existing debt, while the remaining amount will be directed for the acquisition of a stake through ICON in the portfolio of seven luxury heritage hotels owned by the Egyptian Government, for which definitive agreements have been signed.
Following the transaction, ICON will have a combined portfolio of 15 hospitality assets with a total of around 5,000 keys in prime locations including Cairo, Luxor, Aswan, Sharm El-Sheikh, and Alexandria.
Humaid Matar Al Dhaheri, Managing Director and Group CEO of ADNEC, said: “The investment in ICON is an important strategic step for ADNEC Group, as we deliver on our global expansion strategy and will provide ADNEC Group and its portfolio companies with access to Egypt’s rapidly growing tourism market and reaffirms our commitment to enhancing our hospitality and tourism platform.”
Hisham Talaat Moustafa, CEO and Managing Director of TMG Holding, commented: “Through this partnership, we will pursue substantial growth opportunities in Egypt’s tourism sector and beyond and will unlock further value for our shareholders.”
It is worth noting that EFG Hermes acted as the sole financial advisor to TMG Holding on the transaction, which is subject to customary closing conditions.
In the first nine months (9M) of 2023, TMG Holding posted consolidated net profits after tax and non-controlling interest valued at EGP 2.68 billion, higher by 34% year-on-year (YoY) than EGP 1.99 billion.
