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Fri, Nov 15, 2024 | Jumada al-Awwal 13, 1446 | DXB
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ADQ pumps $1b investment into Lulu's Egypt expansion
Dubai - In November 2019, ADQ signed an agreement to set up the joint investment platform worth $20 billion with the Sovereign Fund of Egypt.
Abu Dhabi state investment company ADQ will invest a further $1 billion in Lulu International to help fund the retail giant's massive expansion in Egypt.
ADQ's latest cash injection into the region's fast-expanding hypermarket operator is subsequent to a recent $1.1 billion investment to acquire an almost 20 per cent stake in Lulu Group's international businesses excluding its Indian and Qatar operations.
Business strategy: ADQ and LIHL will work to collectively develop up to 30 hypermarkets and 100 express mini-market stores. - File photo
On Monday, ADQ announced the signing of a non-binding agreement with Lulu International Holdings (LIHL), paving the way for an investment supporting LIHL's expansion of operations in Egypt of up to $1 billion.
The agreement was signed by Mohamed Hassan Al Suwaidi, chief executive officer of ADQ, and Yusuff Ali MA, Chairman of Lulu Group.
The infusion of new funds by the state investment firm comes amid discussions by Saudi Arabian sovereign wealth fund, Public Investment Fund, for a deal to buy a minority stake in the $7.4 billion turnover Lulu Group.
ADQ, which is headed by Sheikh Tahnoun bin Zayed Al Nahyan, is one of the biggest wealth funds in the region with a broad portfolio of major enterprises spanning key sectors.
Under the terms of the agreement, ADQ and LIHL will work to collectively develop up to 30 hypermarkets and 100 express mini-market stores as well as state-of-the-art logistics hubs, distribution and fulfilment centres to strengthen the retailer's ecommerce business across Egypt.
It is estimated that this expansion will create up to 12,000 jobs, fostering economic and social growth throughout the country, ADQ said in a statement.
"Our agreement with Lulu International Holdings reflects our wider commitment to investing in Egypt, following the announcement of our joint investment platform with the Sovereign Fund of Egypt late last year," said Al Suwaidi.
In November 2019, ADQ signed an agreement to set up the joint investment platform worth $20 billion with the Sovereign Fund of Egypt. The platform seeks to establish a joint investment projects, as well as specialised funds and investment tools in several key sectors.
Al Suwaidi said the phased roll-out of multiple retail stores would provide significant socio-economic benefits to local communities across the country, as well as bolster the quality and range of products available to Egyptian consumers. "We are pleased to be able to give further support to the co-operation that already exists between the UAE and Egypt."
Yusuff Ali said Egypt is a very important growth market for Lulu Group, and there is a great potential for the group's future business there.
"Our agreement with ADQ will better position us to continue the rapid expansion of our operations across Egypt. I take this opportunity to thank the leadership of Abu Dhabi and ADQ for their support to expand Lulu's operations in Egypt which will immensely benefit the country and its citizens," Yusuff Ali said.
Lulu Group, which operates 194 Hypermarkets, has more than 55,000 employees, serving more than 1.6 million customers daily with operations in 22 countries. Apart from retail, it has business interests in food processing, hospitality (Grand Hyatt, Marriott in India and Sheraton in Oman, London Scotland Yard) and online shopping.
- with agency inputs, issacjohn@khaleejtimes.com
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