ADM Eyes Egypt Buy as Pound Float Seen Boosting M&A Interest

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Archer-Daniels-Midland Co.’s Swiss unit is seeking to buy a stake in Egyptian sweeteners-maker National Co. for Maize Products, an early sign that the Arab country’s currency float has made some local companies more attractive to foreign investors.

The deal between ADM’s Swiss unit and Misr Capital Investment to buy its 43 percent stake doesn’t include price or conditions, Cairo-based NCMP said in a filing to the Egyptian bourse on Thursday. The U.S company will bid for 100 percent of NCMP if the deal is successful.

“This deal tells us about the attractiveness of the Egyptian market for mergers and acquisitions activity because it has become very cheap,” said Radwa El-Swaify, head of research at Cairo-based investment bank Pharos Holding. “They are buying a much cheaper asset compared to what they would pay if they build a similar factory.”

Egypt abandoned currency control in November, a step that was crucial to securing a $12 billion International Monetary Fund loan. The pound has lost more than 45 percent of its value since then. International investors have bought a net total of about $300 million of Egyptian stocks, according to data compiled by Bloomberg. Shares in NCMP have gained more than 11 percent since the currency float, valuing the company at about 400 million Egyptian pound ($25 million.)

NCMP reported a net loss of 172.2 million pounds in 2016 compared to a profit of 70.1 million pounds in 2015, attributing the drop to foreign currency valuation losses following the decision to float the pound.

(Updates headline, adds NCMP 2016 results in last paragraph.)
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