Swedish household appliances maker Electrolux entered into a preliminary agreement with Paradise Capital Holding Monday to acquire a 52% stake in Olympic Group. Egypt-based Olympic is a major manufacturer of household appliances in the Middle East and North African region.
Electrolux will acquire the majority share in the Olympic Group from Paradise Capital, which is an Egypt-based company that holds majority stakes in a number of local companies. The deal is seen as an indication of Electrolux's plans to expand its footprint in the Arabian and North African region, which it sees as one of the emerging markets.
The deal will be completed after Paradise Capital takes over Olympic Group's ownership of Namaa and B-Tech; which are two listed Egyptian companies. The rest will be acquired by Electrolux with the total estimated value of Olympic Group to be around 2.7 billion Egyptian pounds, or approximately $474 million.
Electrolux will pay a price of around EGP45.30 per share, or up to $7.95 a share, for the acquisition. The 52% stake translates to approximately 31 million shares, or up to $248 million in total worth.
Olympic Group and Electrolux share a number of manufacturing capabilities as they both have bee involved in technology, component supply, distribution and brand licensing for a long time. Olympic Group employed 7,300 employees in 2009 and sold up to $369 million worth of products; it has a 30% market volume share in Egypt.
The deal surged Electrolux's shares by up to 3.2%, or SEK5.40, at SEK173.90, as of 0752 GMT.
