Edita Food Industries, the Egypt-based bakery group, has failed to reach a deal to buy local peer Egyptian Belgian Company for Industrial Investments.
In November, the Cairo- and London-listed Edita announced the two companies had signed a “non-binding letter of intent” over a possible deal.
In a stock-exchange filing, Edita said at the time the tentative agreement covered “the acquisition by Edita or any of its designated affiliates or subsidiaries to assets owned by the Egyptian Belgian Company, including real estate assets such as lands and buildings, as well as machinery, equipment, and production lines”.
Today (4 January), Edita announced discussions had broken down.
“Edita Company wishes to announce that no satisfactory agreement has been reached, and therefore negotiations on such transaction have been suspended,” the company said in a brief statement.
Egyptian Belgian Company is the owner of cake, croissants and doughnuts brand Ole.
Edita manufactures branded baked snacks including cakes, wafers and biscuits under brands such as Todo, Molto and Bake Rolz. More than 90% of its revenue is generated in Egypt.
In the first nine months of the year, Edita’s revenue increased 33% to EGP3.71bn (US$235.9m). The company’s net profit was up 57.8% at EGP276.2m. Its gross margin stood at 30.9%, down from 33.7% a year earlier, amid higher raw material and energy costs.
In October, Edita set out plans to increase prices on products sold under its flagship brand Molto. The company said the hikes would improve profits amid “global inflationary pressures and rising commodity prices”.
In 2020, the company generated revenue of EGP4.02bn, flat on a year earlier. More than 42% of its revenue came from packaged cakes. Net profit was EGP302.2m, down 16.6% on 2019.