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Prominent Dubai businessman Mohammed Alabbar has bought a controlling stake in food conglomerate Kuwait Food Company, known as Americana, from Kuwait’s Khorafi family for $2.4bn, the biggest Middle Eastern mergers and acquisitions transaction this year.
Adeptio, an investment vehicle led by Mr Alabbar, said it entered into a legally binding implementation agreement to acquire the 69 per cent stake of the food production and restaurant chain business held by the Khorafi family’s Al Khair entity.
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“We are delighted to have acquired one of the crown jewels of the Middle East,” Mr Alabbar said in a statement. “We look forward to building on Americana’s success.”
Mr Alabbar, who chairs Dubai real estate group Emaar, clinched an initial accord in February, subject to due diligence, but in late May Al Khair said the $1.8bn deal had collapsed and that talks would cease.
Adeptio’s higher $2.4bn bid for the Khorafi family’s main business asset helped finalise the agreement, bankers said.
“This is usual in negotiations,” said a senior principal working on the deal. “The deal is good for both parties.”
In accordance with Kuwait stock exchange rules, Adeptio will have to launch a mandatory takeover offer for the rest of the company.
The purchase price is KD2.650 a share, or a 26 per cent premium over the last closing price on June 15.
Americana, one of the region’s largest food manufacturers, also operates fast-food brands, including KFC and Pizza Hut, at almost 1,700 outlets across the Middle East and North Africa.
Standard Chartered Bank assisted in structuring the acquisition financing, joining Credit Suisse, Ahli United Bank, Emirates NBD, First Gulf Bank and National Bank of Abu Dhabi as lead arrangers for the transaction.
Goldman Sachs was the financial adviser for Adeptio. Rothschild advised Al Khair.
Bankers are excited at the closure of the Americana saga, a deal that has been in the offing for more than two years via an auction process, attracting both private equity and trade interest.
The regional M&A market has been muted over the past 18 months as the collapse in oil prices, and a subsequent cut in government spending, knocked the region’s economic confidence.
“I think a transaction of this size and complexity provides a timely shot in the arm for the high-end M&A market in the region,” said Mohammed Al-Shukairy, an M&A partner with Clifford Chance, the legal adviser to Al Khair.
The sustained price drop is raising expectations that more distressed assets could prompt a surge in dealmaking in the months to come.