Key Points:
- UAE firm offers $558 million to buy 24.5-percent stake in Egypt’s leading electrical equipment manufacturer. Deal hinges on minimum 15-percent purchase.
- The offer sparked a rise in Elsewedy’s share price, reflecting investor confidence in the potential deal.
- Elsewedy Electric reported strong profits in 2023, boosted by regional projects and global expansion.
United Arab Emirates-based Electra Investment Holding has submitted an offer to acquire a 24.5-percent stake in Elsewedy Electric, a leading manufacturer of electrical equipment majority owned by the Egyptian billionaire El-Sewedy family.
Electra filed an offer with the Financial Regulatory Authority (FRA) to purchase up to 24.5 percent of Elsewedy Electric for $1.05 per share, valuing the potential transaction at $558.43 million.
The move triggered a surge in Elsewedy Electric’s shares, reflecting investor optimism about the potential deal. The offer requires a minimum purchase of 15 percent of Elsewedy’s shares for the deal to proceed.
Elsewedy Electric powers up profits
Founded in 1938 by the El-Sewedy family, Elsewedy Electric has become a major force in the electrical equipment manufacturing sector, contributing significantly to projects across the Middle East and North Africa.
Egyptian billionaire Ahmed El-Sewedy and his siblings control a 68.1-percent stake in the company. Under their leadership, Elsewedy Electric has enjoyed a period of strong financial performance.
The company’s consolidated profits surged 93.56 percent year-on-year to EGP11.14 billion ($238.73 million) in 2023. Consolidated revenues also jumped 65 percent to EGP152.18 billion ($3.26 billion) during the same period.
Reflecting this robust performance, Elsewedy Electric distributed EGP1.06 billion ($22.72 million) in dividends to shareholders for the 2023 fiscal year.
Elsewedy Electric navigates headwinds with global expansion
Elsewedy Electric has weathered recent economic headwinds, including currency devaluation and supply chain disruptions, by expanding its international footprint and production capabilities. Increased output from factories in Saudi Arabia and Algeria has helped mitigate the impact of these challenges.
El-Zeiny, Elsewedy Electric’s vice president and CFO, highlighted the positive effect of the Egyptian pound’s depreciation on the company’s exports, particularly to Europe. The UK has emerged as a key destination for Elsewedy’s cables, benefiting from the group’s enhanced competitiveness following the currency shift.
The outcome of Electra’s recent effort remains uncertain, but the move has undoubtedly generated a wave of optimism. A successful bid would create opportunities for shareholders to book profits from their investment in the leading electrical equipment manufacturer.
