UAE's Agthia makes 'strategic' move into Kuwait market

Firm announces 100% acquisition of Gulf state's household name

  
Clocks showing the time in different cities of the world are pictured at the stock market, in Dubai, United Arab Emirates, November 5, 2020.

Clocks showing the time in different cities of the world are pictured at the stock market, in Dubai, United Arab Emirates, November 5, 2020.

REUTERS/Abdel Hadi Ramahi

UAE’s food and beverages giant Agthia Group announced on Thursday a strategic acquisition to expand its footprint in the Gulf Cooperation Council (GCC) region.

Part of the state-owned holding company ADQ, Agthia has signed a sales purchase agreement to acquire a homegrown Kuwaiti brand, Al Faysal Bakery and Sweets, which has an annual turnover of more than $25 million.

“[The move will] build our regional F&B footprint, adding significant scale to our existing operations in Kuwait and further diversifying our portfolio,” said Alan Smith, chief executive officer of Agthia Group.

Agthia Group chairman and chief investment officer Khalifa Sultan Al Suwaidi said the company remains committed to grow across several categories and have identified Kuwait as an important market.

“The acquisition… underscores our priorities to deliver value to our shareholders,” Al Suwaidi said.

“[It] will support the group’s strategic growth, considering the bakery’s strong market share, as well as distribution and manufacturing capabilities,” he added.

The Abu Dhabi-listed firm has recently agreed to proceed with the proposal to merge with Al Foah Company, the world’s largest dates processing and packaging company, also based in the UAE capital.

Kuwait acquisition

During the fiscal year 2019, Al Faysal Bakery and Sweets generated revenues of 92 million dirhams ($25 million) and net income of 17.2 million dirhams ($4.6 million).

The household name with more than 500 staff on its payroll has been known in Kuwait since 1991, and it has a streamlined value chain of manufacturing, distribution and market share.

(Writing by Cleofe Maceda; editing by Seban Scaria)

Cleofe.maceda@refinitiv.com

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© ZAWYA 2020

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