Oct. 18 (Bloomberg) -- Sharkia National Food led gains among Egyptian food producers after Saudi Arabia’s Savola Al-Azizia United Co. bought stakes in two local food companies.
Cairo-based Sharkia climbed to the highest level in more than three weeks. Middle & West Delta Flour Mills, a producer of flour, bread and pasta increased 2.6 percent. The benchmark EGX 30 Index retreated 0.8 percent at the 2:30 p.m. close in Cairo.
Savola said its Egyptian unit agreed to buy 78 percent of pasta makers al-Malika and al-Farasha for 556.5 million Egyptian pounds ($93 million). The companies own two factories in Egypt with a production capacity of 120,000 tons per year and a market share of 30 percent, Savola said in a statement today.
“There definitely could be more consolidation in the fragmented food market,” said Wafaa Baddour, equity analyst at Cairo-based investment bank EFG-Hermes Holding SAE. “Speculation will increase regarding possible mergers and acquisitions in the food sector, but it will all depend on each company’s circumstances.”
Sharkia gained 4 percent to 4.91 pounds. Middle & West Delta closed at 46.95 pounds, the highest since July 2008.
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