ADQ and ADNEC will invest through a special purpose vehicle, with 49% equity ownership by ADQ and 51% by ADNEC
Abu Dhabi’s wealth fund (ADQ) and subsidiary ADNEC Group have closed a 40.5% strategic acquisition of Talaat Mostafa Group’s hospitality arm, ICON, through a capital increase to take part-ownership in several of Egypt’s most renowned hotels.
“The transaction represents a major foreign direct investment in Egypt and marks a strong vote of investor confidence in the Egyptian tourism and hospitality sector,” ADQ said in a statement, however, the company did not disclose the value of the transaction.
ADQ and ADNEC will invest through a special purpose vehicle, with 49% equity ownership by ADQ and 51% by ADNEC.
ICON recently acquired 39% of Legacy Hotels back in late December through the state privatization program, which was announced to climb to 51% within an unspecified period, providing TMG’s hospitality arm with control over some of the country’s most iconic hotels.
The December acquisition included the Cairo Marriott Hotel in Zamalek, Marriott Mena House, Steigenberger Hotel El Tahrir Cairo, Steigenberger Cecil Alexandria, Sofitel Legend Old Cataract Aswan, Mövenpick Aswan, and Sofitel Winter Palace Luxor, with additional properties in Cairo, Luxor and Marsa Alam.
The ADQ/ADNEC investment into ICON will be utilized to “partially to deleverage the existing debt” of ICON, with the remaining investment directed towards paying for the latter’s December acquisition of Legacy Hotels.
Hisham Talaat Moustafa, CEO and Managing Director of TMG Holding, stated “We are delighted to have ADQ and ADNEC join us as strategic partners and shareholders in this landmark transaction and provide for an exciting outlook going forward. Through this partnership we will pursue substantial growth opportunities in Egypt’s tourism sector and beyond and will unlock further value for our shareholders”.
TMG recorded real estate sales of $3 billion (EGP 93.1 billion) during the first 9 months of 2023.
