Electrolux buys controlling stake in Egypt’s Olympic Group for $246 million

Electrolux, the world's second largest household appliance manufacturer, today said that it will acquire a majority stake in Olympic Group Financial Investments, one of the largest manufacturers of household appliances in the Middle East and North Africa, in a transaction valued at about $246 million.

Stockholm-based Electrolux will buy a 52-per cent controlling stake in Egyptian wash-machine manufacturer Olympic from private equity firm Paradise Capital for 45.3 Egyptian pounds per share and launch a mandatory tender offer for the remaining shares on completion of the deal at the same price.

Cairo-based Olympic, which has a market capitalisation of around $315 million has a successful commercial partnership with Electrolux for almost 30 years, by selling the Swedish company's products in the Middle East and North African region.

Egyptian Stock Exchange listed Olympic has 7,300 employees and manufactures washing machines, refrigerators, cookers and water heaters. In 2009, the company had sales of EGP 2.1 billion and a market share of 30 per cent in Egypt.

Post closing of the transaction, Olympic said that it will enter into a management agreement with Electrolux and Paradise Capital. Against a management fee Electrolux and Paradise Capital will ensure continued technical and management support to Olympic, at terms to be agreed upon in detail at a later stage.

''This milestone transaction truly reflects the uniqueness of Olympic Group and highlights the significant value that we have created over the years for Olympic Group's shareholders. The successful closing of this transaction will generate the necessary funds for Paradise Capital's ambitious expansion plans in its widely diversified business segments,'' said Paradise Capital in a statement.