Abu Dhabi Fund Acquires Over 40% Of TMG’s Hospitality Arm

January 16, 2024


Abu Dhabi wealth fund ADQ announced on Saturday that it will acquire a 40.5% stake in ICON, the listed hospitality arm of Egypt’s Talaat Moustafa Group (TMG), allowing the ADQ to take part ownership of several luxury hotels across the country.

The value of the acquisition was not disclosed.

Under the deal, a special purpose vehicle owned by ADQ and its unit Abu Dhabi National Exhibitions Company (ADNEC), with respective 49% and 51% holdings, will carry out a capital increase to acquire the ICON stake.

EFG Hermes is acting as the sole financial advisor to TMG Holding on the transaction, which is currently under the customary closing conditions.

In December, TMG’s ICON finalized an $882 million deal to acquire a 39% stake in Legacy Hotels, which owns seven historical state-owned hotels.

The seven hotels are Sofitel Legend Old Cataract Aswan, Mövenpick Resort Aswan, Sofitel Winter Palace Luxor, Steigenberger Hotel Tahrir, Steigenberger Cecil Hotel Alexandria, Marriott Mena House Cairo, and Marriott Omar Khayyam Zamalek.

ICON owns four operational hotels, which are Four Seasons Cairo at Nile Plaza, Kempinski Nile Hotel Cairo, Four Seasons Sharm El-Sheikh, and Four Seasons Alexandria at San Stefano.

“The transaction represents a major foreign direct investment in Egypt and marks a strong vote of investor confidence in the Egyptian tourism and hospitality sector,” ADQ said in a statement.

Post-transaction, ICON will have a combined portfolio of 15 luxury and upscale hospitality assets with a total of around 5,000 keys in prime locations including Cairo, Luxor, Aswan, Sharm El Sheikh, and Alexandria. 

The acquired hotels in Egypt are managed by best-in-class operators and will continue to benefit from the synergies, resources, and in-country expertise of TMG Holding, according to ADQ.

“The investment in ICON is an important strategic step for ADNEC Group, as we deliver on our global expansion strategy and will provide ADNEC Group and its portfolio companies with access to Egypt’s rapidly growing tourism market and reaffirms our commitment to enhance our hospitality and tourism platform,” said Humaid Matar Al Dhaheri, managing director and group CEO of ADNEC Group.

“We will work closely with TMG Holding to enhance and grow ICON and create additional value for our shareholders,” he added.

ADQ said that this transaction reinforces its interest in investing in assets that can provide continued upside growth and sustainable returns. ADQ is a long-term investor in the Egyptian economy.

Meanwhile, Hisham Talaat Moustafa, CEO and Managing Director of TMG Holding noted: “We are delighted to have ADQ and ADNEC join us as strategic partners and shareholders in this landmark transaction and provide for an exciting outlook going forward. Through this partnership, we will pursue substantial growth opportunities in Egypt’s tourism sector and beyond and will unlock further value for our shareholders.”

In the past years, ADQ has made investments in market leaders across different sectors, including the acquisition of Amoun Pharmaceutical Company., one of Egypt’s leading pharmaceutical manufacturers, distributors, and exporters.

ADNEC Group has evolved into a full-service tourism solutions provider by creating Tourism 365, a leisure tourism arm, that has existing operations in Egypt and hence offers significant synergistic potential with the investment in ICON.