Abu Dhabi wealth fund ADQ has acquired a 40.5% stake in ICON, the hospitality arm of Egypt’s Talaat Moustafa Group (TMG), in a move seen as a major vote of confidence in the country’s resurgent tourism sector.
The deal, announced Friday, will see ADQ and its subsidiary, ADNEC, jointly invest in a special purpose vehicle that will acquire the stake through a capital increase. The exact financial details of the transaction were not disclosed.
“This transaction represents a significant foreign direct investment in Egypt and underscores our strong belief in the Egyptian tourism and hospitality sector,” ADQ said in a statement.
The agreement includes a stake in seven iconic heritage hotels currently owned by the Egyptian government through ICON. These include Four Seasons properties in Cairo, Sharm El Sheikh, and Alexandria, as well as the Kempinski Nile Hotel in Cairo.
In December, Egypt’s sovereign wealth fund sold a 39% stake in these seven hotels to TMG for $800 million, with an option to increase its holding to 51%. The ADQ deal reportedly includes an additional $882.5 million investment for a minority stake in ICON.
This move aligns with the strengthening political and economic ties between the United Arab Emirates and Egypt. The Gulf state has supported Cairo through financial injections and investments, increasingly opting for ventures offering potential returns. ADQ alone invested $1.85 billion in Egyptian firms in 2022, while Egypt sold minority stakes in three oil and petrochemical companies to the fund for $800 million last year.
Egypt’s asset sales are aimed at boosting the private sector, securing much-needed hard currency, and supporting economic reforms undertaken as part of a $3bn IMF loan program.
The ADQ investment in ICON is expected to further revitalize Egypt’s tourism industry, which has been steadily recovering from the pandemic’s impact. The influx of foreign capital and expertise is seen as a positive step towards building a more resilient and competitive hospitality sector in the country.
