Thailand-based Indorama Ventures has purchased a 74% stake in Egyptian firm Medco Plast for Packing and Packaging Systems from Middle East Glass Manufacturing (MEG) and the Samaha family.
MEG will hold a16% share and the Samaha family will own a 10% stake in Medco Plast, following the acquisition.
The deal is valued at around EGP843m ($47m), according to HC Securities and Investment, which served as the sole financial advisor to MEG and the Samaha family.
Medco founder, CEO and shareholder Mohamed Samaha said: “I strongly believe the partnership with Indorama Ventures will help Medco fuel and advance its ambitious business plan. We look forward to working hand in hand with Indorama to unlock Medco’s full potential.”
Medco Plast is engaged in the manufacturing of recyclable PET performs, injection molded products, and closures for major multinational soft drink and water manufacturers operating in Egypt.
At present, the company operates 11 advanced production lines, with a combined annual production capacity of 70,000 metric tons of PET performs. It has a 25% market share in the segment in Egypt.
The acquisition will help Indorama to expand its presence in the East African PET packaging market, as well as complements the existing operations in West African countries such as Nigeria and Ghana.
Indorama is planning to add advanced capabilities and supply chain economies to further expand Medco Plast’s operations in the region.
Indorama Ventures Group CEO Aloke Lohia said: “The acquisition of Medco aligns with Indorama Ventures’ strategic focus, which includes capitalizing on growth opportunities in emerging markets.
“Medco’s strong presence in the domestic market and a longstanding customer relationship with all beverage majors operating in Egypt will enable the Company to support growing local customers’ demand and provide a platform for further growth in the Middle East and African regions.”
Matouk Bassiouny & Hennawy served as legal counsel to MEG, while Shehata Law firm acted as legal counsel to the Samaha family and Baker & McKenzie acted as the legal counsel to Indorama Ventures.
In August this year, Indorama Ventures agreed to acquire French plastics recycling firm Sorepla Industrie for an undisclosed sum.