Arla Foods Makes $183 Million Bid for Majority Stake in Egypt’s Domty

United Kingdom (UK) 16.10.2024

Source: DairyNews.today

Arla Foods has announced a non-binding offer to acquire a majority stake in the Egyptian food-and-beverage company Arabian Food Industries, commonly known as Domty, at a valuation of E£8.9 billion ($183 million). The dairy giant has offered E£31.48 ($.64) per share, with plans to delist the company from the Egyptian stock exchange.

Arla Foods Makes $183 Million Bid for Majority Stake in Egypt’s Domty

Domty, a major player in Egypt’s dairy and juice market, reported revenues of E£7.5 billion and a gross profit of E£1.58 billion in 2023. With around 4,000 employees and two production facilities, Domty is well-positioned in Egypt's food sector, which Arla sees as a strategic growth area. Mohamed El Damaty, Domty's CEO, is expected to stay on, with the El Damaty family retaining a stake in the company.

Kim Villadsen, Arla’s senior vice president for the Middle East and North Africa (MENA) region, noted, “The dairy market in Egypt is substantial, and Domty aligns with our strategic objectives in the region. We are carefully reviewing details before proceeding.”

Arla Foods continues to expand its footprint across the MENA region, which accounted for €996 million ($1.09 billion) of its revenue in 2023, reflecting a 3.2% increase. This region is Arla’s largest commercial area outside of Europe, driven by strong demand for its flagship brand Puck.

Meanwhile, Arla’s revenue in West Africa dropped 18.8% due to currency devaluation in Nigeria, highlighting the varied market dynamics across regions. Arla has also announced plans to expand its early life nutrition (ELN) offerings, though restructuring efforts in this division may lead to workforce adjustments.