Savola to buy stake in two Egyptian food companies

Saudi Arabia-based food company Savola Azizia has signed an agreement to acquire a 78% stake in two Egyptian food companies for EGP557m ($93m), in an effort to increase its regional footprint in food products.

The two companies, Al-Malika and Al-Farasha, are involved in manufacturing and marketing pasta inside and outside Egypt, and have a combined production capacity of 120,000t of pasta a year and account for 30% of the market in Egypt.

The acquisition of the stakes in the two firms will be self-financed, the company said.

Savola, which initially announced its plans to enter the pasta market at the end of 2009, plans to capitalise on the fragmented nature of the Saudi grocery market, where the top five companies have a combined market share of just 15%.