Agthia tightens grip on UAE bottled water market with three acquisitions

Agthia reported a 20 per cent increase in first-half profit this year, boosted by its bottled water segment. Delores Johnson / The National

Agthia has tightened its grip on the bottled water market with its latest acquisitions.

The food and beverage group listed in Abu Dhabi yesterday said it had agreed to buy Al Bayan Purification and Bottled Water, Shaklan Plastic Manufacturing and Al Manal Purification and Bottling Mineral Water.

It did not disclose how much it paid for the trio.

Agthia, which manufactures Al Ain bottled water and Agrivita animal feed, is the biggest supplier of bottled water in the UAE, with about a quarter of the market.

This latest acquisition will allow it to leap to No 2 in the UAE for bulk water – 5-gallon containers – and consolidate its position for bottled water.

Al Bayan’s assets are mostly located in the Northern Emirates and Oman where it has a manufacturing operation, while Agthia’s facilities are mainly located in Abu Dhabi.

“We are very excited to merge our strengths with those of Al Bayan,” said Iqbal Hamzah, chief executive of the Agthia Group.

"As a major player in the 5-gallon bottled water segment in the UAE, Al Bayan is an excellent strategic fit for Agthia, further consolidating our leading position in the UAE water market."

The rapidly expanding population of the region has spurred investment in the food and beverage sector and trigged a wave of mergers and acquisitions from Cairo to Riyadh.

Agthia reported a 20 per cent increase in first-half profit this year, crediting higher sales and production from its bottled water segment.

Its water sales, which include the Alpin brand, jumped 25 per cent to reach Dh297 million as it expanded its Al Ain factory.

In April it increased prices for its bottled water by 15 per cent for retail customers.

“On a very high level it [the acquisition] makes sense, because it helps them grow,” said Asjad Yahya, a research analyst at Shuaa Capital. “They obviously know the bottled water business and have a great strength in the sector, and I’m sure they’ve done their due diligence.

However, without knowing the price of the deal or the synergies that are apparent and the valuations on the different facets, it is hard to say whether they paid too much or got a great deal.”

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