Gulf Capital Acquires Stake in Middle East Glass

Gulf Capital announced the acquisition of a minority stake in Middle East Glass Manufacturing.

Middle Eastern investment firm Gulf Capital announced that it has successfully completed acquisition of a strategic minority stake in Middle East Glass Manufacturing (MEG). MEG, listed on the Egyptian Exchange as MEGM.CA, is the country’s largest container glass manufacturer and producer of PET pre-forms for carbonated soft drinks. The company is a worldwide approved supplier of glass bottles for Coca-Cola, an approved supplier for Pepsi, Nestle and other major beverage producers locally and regionally.
Dr. Karim El Solh, Chief Executive Officer of Gulf Capital said, “This investment gives Gulf Capital exposure to the fast growing food and beverage sector and, more importantly, allows us to share in the recovery and growth of the Egyptian market. MEG has distinguished itself with its market leadership and strong management and technical team and has consistently demonstrated its ability to capture growth in one of the most important markets in the Middle East.”
Abdul Galil Besher, Chairman of Middle East Glass Manufacturing, said, “We are very pleased to welcome Gulf Capital among our investors, and we think this partnership gives MEG significant impetus going forward to accelerate the growth of our business and strengthen our market position.”
The mid-to-long term view of the Egyptian market remains positive, with Egypt’s consumer expenditure on food and non-alcoholic beverages growing by 7 percent in 2012, higher than the average growth in the Arab region, as well as in other emerging and developing countries, which grew at 5 percent. The sector’s growth internationally lingers at a modest 2percent annually on average. In Egypt, the food and beverage sector remains attractive. Between 2009 and 2012, juice, jams and carbonated soft drink volumes registered a compound annual growth rate (CAGR) of 12.4 percent, 20.2 percent and 17 percent respectively.
Richard Dallas, Managing Director, Private Equity at Gulf Capital, said, “MEG is a high quality glass and PET producer and is a highly competitive producer on a global scale. We believe that our investment in MEG will allow us to capitalise on the fast growing consumer and food and beverage sector in Egypt. Per capita carbonated soft drink consumption in Egypt is 90 unit servings, compared to Saudi Arabia’s whooping 250 unit servings per annum.  Similarly, per capita juice consumption is 3kg vs. 13kg in the Arab region. The low penetration and strong upside potential clearly present MEG with an opportunity to grow its packaging business within Egypt and beyond. We are committed to supporting MEG to become the largest F&B packaging company in the region by assisting the Company in its regional expansion and by securing potential add-on acquisitions over the coming years.”
Gulf Capital was advised by Freshfields Bruckhaus Deringer LLP, Matouk Bassiouny and PriceWaterhouseCoopers. HC Securities and Investment and Mena Associates acted as the advisors to MEG.