Saudi Firm CPC buys Citadel Capital’s Sphinx Glass for $190 mln

Big 5

Construction Products Holding Co (CPC), a unit of private Saudi Arabian construction giant Saudi Binladin Group, said on Monday it had bought Egyptian Citadel Capital’s non-core portfolio company, Sphinx Glass for $ 190 million.

The deal underlines growing interest among Gulf companies in Egyptian assets as Egypt’s economy begins to recover after three years of turmoil following the toppling of Hosni Mubarak in 2011.

The Saudi Arabian, United Arab Emirates and Kuwaiti governments are pouring billions of dollars of aid into Egypt and encouraging firms to consider investing there.

Under CPC’s ownership, Sphinx will meet growing demand for float glass in local and export markets, setting up a second production line to increase capacity, CPC’s director of business development Faysal Alaquil said in an emailed statement released by Reuters.

Sphinx, which expects a construction boom in Egypt as the government seeks to ease social tensions by stepping up construction of lower and middle-income housing, aims to increase its revenues to $63.2 million this year from $55 million in 2013.

CPC bought most of the company from Egyptian investment firm Citadel Capital, which said earlier this month that it had received an offer of $112 million for its 73.3% stake in Sphinx. The rest of Sphinx was owned by other investors, who were also bought out by the Saudi firm.

The deal is part of a programme by Citadel, which has $9.5 billion of assets under management, to exit non-core assets and focus on energy, transport, agrifoods, mining and cement over the next five years.

Among other Gulf investment projects announced this year in Egypt, Saudi Arabia’s Aujan Coca-Cola Beverages Co plans to spend $100 million building a fruit juice factory, while Dubai retailer Majid Al Futtaim says it aims to invest about $2.3 billion over the next few years.

Egyptian officials have said they expect more than $4 billion of direct foreign investment in the country in the current fiscal year to end-June, up by more than a third from the previous fiscal year.