Home » Nassef Sawiris’ Orascom Construction completes acquisition of equipment distribution business

Nassef Sawiris’ Orascom Construction completes acquisition of equipment distribution business

by Omokolade Ajayi

Orascom Construction has completed the acquisition of a leading equipment importation, distribution and services business in Egypt for an undisclosed sum.

Orascom Construction, Egypt’s first multinational corporation, is a leading global engineering and construction contractor with active operations and investments in the Middle East, Africa and the United States.

The newly acquired company follows an asset-light importation, distribution and maintenance business model. Grove, John Deere, Volvo Penta, Hitachi and Mitsubishi Heavy Industries are part of its operating portfolio.

The acquisition deal was completed nearly two months after it announced its intention to buy the company.

According to a press release issued by the group, ownership of the business has been transferred to Orascom Construction Plc, which will integrate the business into its diverse operations.

Experts close to the transaction believe that the strategic expansion move will unlock value for the Sawiris family, while also providing a platform for Orascom Construction to expand in the services sector and grow the group’s non-EPC business in a complementary field, while also serving as a launching pad for the target company’s next phase of growth.

The board expects mutual benefits through collaboration in operations, capital investment and financial optimization.

Earlier this month, Orascom Construction revealed that it added new projects worth $785 million to its backlog of active construction works in Q4 2021, raising the total number of awards linked to the group by 22 percent to $3.5 billion in 2021.

A breakdown of the figure revealed that projects in the Middle East comprised 55 percent of the new awards for the period., including transportation and power projects in Egypt and water projects in Egypt and Tunisia.

Outside the Middle East, new awards in the United States accounted for 45 percent of the total additions in the quarter, with new commercial projects driving forward the figure.

OS Private Trust Company owns 51.8 percent of the Egypt-based contractor for the Sawiris family’s benefit. At the same time, Egypt’s richest man, Nassef Sawiris, owns 28.97 percent of the company, or 33,825,323 ordinary shares.

As of press time on Jan. 25, shares in the group were trading at EGP73.03 ($4.65), 45 basis points higher than the Egyptian Stock Exchange’s opening price this morning.

At the current price, the group’s market capitalization is worth EGP8.53 billion ($542.8 million), while Nassef Sawiris’ stake is worth EGP2.47 billion ($157.2 million).

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