Arla Foods, a dairy company from Denmark and Sweden, is offering $183 million to buy Egypt’s Domty
Danish-Swedish dairy company Arla Foods has made an offer to buy up to 100% of Egypt’s Arabian Food Industries Company (Domty) for $183 million (EGP 8.9 billion), according to a company statement released on Tuesday.
Acquisition Bid
Arla Foods announced that they have made an offer to buy Domty at $0.65 (EGP 31.48) per share. After this news, Domty’s share price rose by about 20% on Wednesday, reaching $0.45 (EGP 21.6) around 3:50 PM AST.
The current owners, the El Damaty family, will still own a part of the company along with Arla, and Mohamed El Damaty will stay on as CEO.
Arla Foods plans to remove Domty from the Egyptian Stock Exchange (EGX) after the purchase, as stated in their announcement.
Kim Villadsen, a senior vice president at Arla Foods for the Middle East and North Africa, said expanding into Egypt makes sense for Arla, as this region is their biggest market outside Europe.
Villadsen also mentioned that the company is looking into the details before deciding whether to go ahead with the acquisition. The offer still needs to pass some checks, final paperwork, and get approvals from companies and regulators.
Important Quote
“The dairy market in Egypt is big. Domty is a top company in that market, and it fits well with our plans in Egypt,” said Villadsen in the statement.
“We are now looking at the details before deciding if we will buy the business,” he added.
Big Numbers
In the first half of the year, Domty’s net profit went down by 4.4% to $4.97 million (EGP 241.6 million), while the company’s sales were $89.31 million (EGP 4.34 billion), according to their financial report.
The Egyptian company has about 4,000 employees and two production sites.
Dairy Giant
Arla Foods is a large dairy company owned by more than 8,400 farmers from Denmark, Sweden, the UK, Germany, Belgium, Luxembourg, and the Netherlands. It owns several well-known brands, like Arla, Lurpak, Puck, and Castello.
According to its website, Arla is the biggest producer of organic dairy products in the world.
In the first half of this year, Arla Foods earned $7.2 billion (EUR 6.6 billion), which is a 4.1% increase compared to last year.
Regional Food and Beverage Deal
Earlier in October, another big food and beverage deal happened in the region.
Almarai Company, a food and beverage giant based in Saudi Arabia, has agreed to buy 100% of Hammoudeh Food Industries in Jordan from its subsidiary, Teeba Investment, for $70 million.
The company stated that this purchase will help strengthen its position in the food and beverage market in Jordan and supports its plan for sustainable growth in important markets and regions.
Published: 17th October 2024
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