Now, France’s Lafarge has bought OCI’s cement operations in a 14.9 billion dollar deal, and in return Nassef gets an 11.4 pct stake in Lafarge plus two seats on the company’s board of directors.
Analysts say OCI wants to focus on construction and infrastructure, but – as you can never quite separate business from politics in the Middle East – I’m wondering whether the Sawiris’ truly believe the Middle Eastern cement boom is over or whether we’re rather seeing a long-term strategy of the three brothers to move part of their assets away from Egypt (and the Middle East).
Their relations with the ruling family don’t seem to be as strong as in the case of other Egyptian business tycoons (which means the impact of Mubarak’s death will not be as strong), but I guess we’ll have to wait for the full picture (on this one as on so many other things) until the Pharao has moved on to another life.
In any case, the proceeds from the sale will be paid out to shareholders as special dividend – i.e. mostly to the Sawiris themselves.
I’m wondering what the brothers are up to with so much cash.
Cashing out of egypt/worried about succession vs. the cement boom being over… why not both? Plus, it’s a good deal to boot.
They’ve been intelligently internationalizing for years now, and he probably figures that the period of massive growth and appreciation of his cement assets is over. Still a good business, but why not let the more competent lafarge, with its massive global distrubution network, manage the mature entity while he collects fat checks (11% of a business that generates about $3.5 billion in profit a year).
Cash is king, particularly when the kings reign is running towards a close. I’m sure the intention is to still do lots of business in egypt and the region, the place after all where they can get the fattest margins, but to be prepared for the worst to happen.