Cairo (Egypt) - The United Foundries Company recently announced its acquisition of a majority stake in Amreya Metal Company (AMC) and Alexandria Automotive Casting (AAC) for a total deal value of €22m.
Together, the three companies will become the region's leading private-sector casting operation with over 40% of the local market for casting products. The group has significant export potential.
United Foundries is a part of the ASEC Group, a cement and cement services group owned by Citadel Capital and its co-investors.
'We are very excited about these two new acquisitions, we believe that the addition of AMC and AAC to our portfolio shall serve to consolidate our position as a MENA market leader in casting operations,' said Selwa Abdel Fattah, United Foundries CEO.
AMC, the older of the two companies, was established in 1979. With an annual production capacity of 8,000 tons of molten metal, the company lacked excess capacity to export and has been catering to the local market.
In 2001, AMC spun-off AAC, a state-of-the-art free-zone company with a capacity of 22,000 tons of molten metal. AAC's primary objective was to provide Continental Teves (CT), a German company and the world's leading automotive industry supplier, with high performance automotive cast parts.
Financial constraints at AMC left AAC undercapitalized from the outset.
Post-acquisition, the companies will be put on the right track with financial restructuring and capital injection for the purchase of new equipment and an upgrading of human resources.
'These two strategic acquisitions are the prefect compliment to United Foundries' current operation boosting both its local market share and export potential,' said Citadel Capital Managing Director, Hisham El-Khazindar.
A highly-qualified management team has already been put together to pool resources and enhance production capacity. Combined annual capacity is expected to double from 30,000 tons to 60,000 tons by 2010.