Diary giant Arla Foods is keen to snap up a majority stake in Egyptian food-and-beverage company Arabian Food Industries, known as Domty.
Arla’s non-binding offer for Domty, announced yesterday (15 October), is worth E£31.48 ($.64) per share, valuing the listed company at E£8.9bn ($183m).
Domty, with a workforce of around 4,000 employees and two production sites, reported sales of E£7.5bn and gross profit of E£1.58bn in 2023.
In a statement, Arla said it would delist dairy and juice business Domty from the Egyptian stock exchange but added the El Damaty family is expected to retain a shareholding in the group. Mohamed El Damaty would remain as CEO.
Kim Villadsen, the senior vice-president of Arla's operations in the Middle East and north Africa, said: “The dairy market in Egypt is substantial, Domty is a leading player in that market and the company is well-aligned with our strategy in Egypt. We are now looking at the details before deciding whether to proceed with purchasing the business.”
The Middle East and north Africa is Arla's largest commercial area outside Europe. In 2023, Arla generated €996m ($1.09bn) of revenue from the region, up 3.2% on the year. Its group revenue stood at €7.98bn, some 2.7% higher than in 2022.
Arla reported a near-13% rise in its foodservice volumes in the Middle East and north Africa. It said volumes of Puck, its largest brand in the region, grew by almost 7%.
Further south in west Africa, the company's revenues plummeted 18.8% to €127m ($138.3m), largely due to the devaluation of the Nigerian naira.
In August, Arla revealed its intentions to ramp up production of early life nutrition (ELN) ingredients. However, the shake-up, which involves the shuttering of a B2B division, is expected to result in some redundancies.
