SBA – Grant Thornton, a member firm of Grant Thornton International and a leading independent professional service firm in Egypt, announced that its Financial Advisory team successfully completed advisory to The Sovereign Fund of Egypt (TSFE) on the landmark restructuring and privatization of seven historic state-owned Egyptian hotels to Arab Company for Tourism and Investments (ICON), the hospitality arm of Talaat Moustafa Group Holding (TMG).
The transaction saw ICON acquire a 39% stake, valued at USD 800 million, in the legacy hotels through a capital increase in the newly established Legacy Hospitality Company (Legacy) – owned by TSFE and the Egyptian General Company for Tourism and Hotels (EGOTH). The deal brings Legacy’s capital to an excess of USD 1.2 billion.
The seven historic hotels include the Sofitel Legend Old Cataract Aswan, Mövenpick Resort Aswan, Sofitel Winter Palace Luxor, Steigenberger Hotel El Tahrir Cairo, Steigenberger Cecil Hotel Alexandria, Marriott MENA House Cairo, and Marriott Cairo Omar Khayyam Zamalek.
Kamel Saleh, CEO of SBA – Grant Thornton commented: “We are incredibly proud to have played a pivotal role in this landmark transaction. Our Financial Advisory team demonstrated exceptional capabilities in navigating the complexities of this deal, which underscores SBA – Grant Thornton’s extensive experience and expertise in the tourism sector as well as our ability to lay the groundwork for strategic public-private partnerships.”
The deal paved the way for Abu Dhabi investment and holding company ADQ to enter into a definitive agreement to acquire a 40.5% stake in ICON in January 2024, including the acquisition of the seven luxury hotels. The move marks a significant foreign direct investment in Egypt and strong vote of confidence in the country’s hospitality and tourism sector.
Tourism remains high on the government’s agenda as a key driver of foreign currency and investment. The sector is expected to continue its growth trajectory, with over 30 million tourist flows expected annually by 2028. The country received more than 7 million tourists during the first half of 2023, the highest in its history.
“The transaction also demonstrates our commitment to carve out not only value-accretive opportunities for our clients but for the benefit of the national economy. Our dedication to excellence and innovation is what sets us apart at SBA – Grant Thornton, and we remain steadfast in our mission to support the growth and development of the Egyptian market,” said Saleh.
The deal is part of a broader plan by the Egyptian government to offer stakes in 35 state-owned companies to strategic investors by the end of June 2024 under the State Ownership Policy Document. Egypt's hospitality and tourism sector is a key area where the state is looking to bolster private sector participation and raise revenue through stake sales, paving the way for transformation of state-owned enterprises.
