Dubai-based private equity company Abraaj Capital is in talks to take over Egyptian Fertilizers Co. EGFR.CA, the general manager of the Egyptian company said on Monday.
Mustafa Kamel said that Abraaj started due diligence studies on the company three weeks ago.
The largest single shareholder in Egyptian Fertilizers, which has an output capacity of about 1.3 million tons, is Saudi food group Savola 2050.SE, he added.
A person familiar with the talks said Abraaj is looking to buy all of the Egyptian company for about $1.3 billion, in the expectation that the global demand for fertilizer will grow in an effort to generate more biofuels.
Abraaj may make an offer in a month, said the source, who did not wish to be identified.
Arif Naqvi, Abraaj’s chief executive, declined to comment when reached by telephone in Dubai.
Savola said last year it owns 30 percent of Egyptian Fertilizers, and offered to pay 3 billion riyals ($800 million) to buy the remaining 70 percent.
Egyptian stock exchange data show no recent activity in the shares of the Egyptian company.
Dubai Investment Group’s DIG Capita CEO Mustafa Farid is a director of Egyptian Fertilizers, according to the web site of the Dubai group. Sheikh Mohammed bin Rashid Al Maktoum, Dubai’s ruler, owns Dubai Investment Group.
