AD Ports Group to buy majority stake in parent company of two Egyptian shipping businesses

This is the first overseas acquisition for the ports operator and will help expand its presence in the Red Sea container, cargo and port operations

Abu Dhabi Ports Group owns and operates 10 ports in the UAE, including Khalifa Port. Reuters

AD Ports Group, the operator of industrial cities and free zones in the emirate, will acquire a 70 per cent stake in Egypt's International Associated Cargo Carrier for Dh514 million ($140m) as it seeks to expand its footprint in the Arab world’s most populous country and the wider region.

IACC, an investment company, owns two Egypt-based maritime companies, Transmar International Shipping and Transcargo International (TCI).

The El Ahwal family and their executive team will remain in management of the two companies after the transaction, Abu Dhabi Ports said in a statement on Friday to the Abu Dhabi Securities Exchange, where its shares are traded.

“This is the first overseas acquisition in AD Ports Group’s history, and an important milestone in our ambitious international expansion plan,” AD Ports Group chairman Falah Al Ahbabi said.

“This acquisition will support our wider growth targets for North Africa and the Gulf region, and broaden the portfolio of services we are able to offer in those markets.”

Established in 2006, AD Ports Group owns and operates 10 ports in the UAE, including Khalifa Port, Zayed Port, Mussaffah Port, Fujairah Terminals, Community Ports, Kamsar Port and the Abu Dhabi Cruise Terminal, as well as a terminal in Guinea.

It also manages more than 550 square kilometres of industrial zones and an end-to-end logistics business, besides offering a range of maritime services.

ADQ, one of the region’s largest holding companies, remains the majority shareholder in AD Ports Group, with a 75.42 per cent stake.

AD Ports Group, which made its debut on the ADX in February after raising Dh4 billion from its share sale, is looking to expand globally.

Last September, the company signed partnership agreements with the Aqaba Development Corporation in Jordan to develop tourism, logistics, transport and digital infrastructure in the Jordanian coastal city.

The acquisition of the Egyptian companies will be fully funded from AD Ports’ existing cash reserves, which stood at more than Dh3bn as of March 31, the company said.

This acquisition is the latest in a series of deals by AD Ports in the Egyptian maritime industry, including agreements with the Egyptian Group for Multipurpose Terminals in March to jointly develop and operate Ain Sokhna Port on the Gulf of Suez.

AD Ports also signed an agreement with the Egyptian Group for Multipurpose Terminals and the River Transport Authority in March to collaborate on three projects — building and operating a river port in Minya, managing and operating warehouses in Damietta and equipping, managing and operating passenger lines in Greater Cairo.

It also signed a deal with the Egyptian Group for Multipurpose Terminals in November last year to develop and operate a multipurpose terminal at Safaga Port on the Red Sea, in addition to an agreement signed in September with the General Company for Ports of Iraq to explore investment opportunities in the country.

“AD Ports Group continues to build up our presence in Egypt as part of our wider strategy for global expansion,” Capt Mohamed Al Shamsi, managing director and group chief executive of the AD Ports Group, said.

“The acquisition of Transmar and TCI, which both have strong regional presence and deep client relationships, is another key step in increasing our geographical footprint.”

Transmar is a regional container shipping company that operates across the Middle East, Red Sea, Arabian Gulf and eastern coast of Africa. In 2021, Transmar handled 109,000 twenty-foot equivalent units (TEUs).

TCI is a terminal operator and stevedoring — cargo loading and offloading — company, mainly operating out of the Adabiya Port. Its two lines of business are container and bulk cargo services, AD Ports said. In 2021, TCI handled 92,500 TEUs and 1.2 million tonnes of bulk cargo.

Cumulatively, Transmar and TCI reported revenue and earnings before interest, taxes, depreciation and amortisation of Dh325m and Dh108m, respectively, AD Ports said.

“Egypt and the Red Sea coast are increasingly important parts of our global maritime offering, and we believe we are well-placed to boost trade and economic growth for customers and communities along these routes,” Mr Al Shamsi said.