Al-Futtaim to acquire Kenyan auto company
Al-Futtaim Group is preparing to make its first foray into sub-Saharan Africa, in a deal that will represent one of the biggest foreign direct investment inflows into the Kenyan economy this year.
The Dubai-based conglomerate wants to buy all of the shares of Nairobi Securities Exchange-listed CMC Holdings Limited for US$86 million.
CMC is a major player in the East African automotive industry, owning CMC Motors Group in Kenya, Cooper Motors Corporation in Uganda, Hughes Motors in Tanzania as well as Hughes Agriculture, also in Tanzania.
"The automotive sector is our key sector, so this company is a perfect fit for us to use as a platform for growth in that region," said Marwan Shehadeh, the group director for corporate development at Al-Futtaim Group.
Al-Futtaim already has a presence in Egypt, with investments across several sectors, including automotive, retail, property and construction.
In total, it has eight registered companies in the country that are either fully owned or joint ventures.
But it is now eyeing up other countries in Africa, and it expects to announce other deals in North and West Africa soon, according to Mr Shehadeh. "The continent is very strategic for us so we are quite active now in that part of the world. Africa is very well connected to Dubai today through air connectivity, Emirates and logistically and geographically it is not too far so it is a natural geographic expansion," he said.
"A couple of years ago we were quite active in South East Asia and now we are going westwards towards Africa. That's our natural geographic expansion area."
In addition to the automotive industry, Al-Futtaim is interested in investing into retail, property and logistics.
Updated: September 10, 2013 04:00 AM