Three Arab companies are to buy Sainsbury's shares in the supermarket chain launched by the British retailer in Egypt last January, state-owned weekly Al-Mussawar said Tuesday.
After the purchase, Saudi companies Al-Mohib and Al-Issai, and Yemeni company Hayel Said, will hold 60 percent of the firm's shares. The main Egyptian partner, Arab Group, holds 20 percent, and the rest of the capital is split among various smaller Egyptian investors.
Three weeks ago, Sainsbury's announced it intended to withdraw from the Egyptian market because it had suffered losses representing 75 percent of the capital of the company they set up in Egypt, Al-Mussawar said.
The transaction is due to take place within days, after which the name of the chain will be changed, the weekly added. Sainsbury's-Egypt opened 114 stores in a year in the Greater Cairo area.
Sainsbury's-Egypt, despite being a British brand, was affected by the calls for a boycott of US and Israeli products. Shortly after the Palestinian uprising erupted in late September, Egyptian students demonstrating against Israel threw stones at two Sainsbury's supermarkets in the suburban town of Maadi, southern Cairo, convinced the owners were Jewish.
Experts also say Sainsbury's-Egypt's failure can be accounted for by a bad market positioning and by the current stagnation of the Egyptian economy, linked to cash shortages, the pound's devaluation against the dollar and sluggish foreign investments. — (AFP, Cairo)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com )