The government is expected to finalize the sale of a stake in Eastern Company, the largest tobacco producer in Egypt, by the first half of 2024, sources told Daily News Egypt.
The Holding Company for Chemical Industries, which owns 50.95% of Eastern Company, has received several offers from foreign investors to buy up to 30% of its share in the company. The sources said that negotiations are underway to choose the best offer among them.
The bidders include Japan Tobacco International (JTI), United Tobacco Company, which is majority-owned by Philip Morris International, and an investor from the Arab Gulf region. The sources said that the bids of JTI and United Tobacco Company were around $700m each.
The sources added that the deal will depend on a due diligence examination and that the two companies have a conflict of interest over the stake. If Philip Morris wins the deal, it will increase its market share and influence in the Egyptian tobacco market, as it already has a license to manufacture cigarettes in Egypt. It will also have a say in the production and distribution of other foreign brands that are monopolized by Eastern Company, including JTI products.
On the other hand, if JTI acquires the stake, it will become a partner of its rival on the board of directors of United Tobacco Company, which is a joint venture between Philip Morris and Eastern Company.
Eastern Company owns about 24% of United Tobacco Company and produces various local and foreign cigarette brands in Egypt.
