Savola Edible Oils Company (SEO) of Saudi Arabia has announced that it has acquired a 49% equity share in an Iranian joint venture entity, Savola Behshahr Company (SBC), from Behshahr Industrial Development Company (BID) on July 8th, 2004. The consideration to be paid by SEO amount to 664,1 billion Iranian Rials or approximately US$76.8 million at the current exchange rate in what is believed to be the largest such international deal in Iran in a non-governmental economic field in the recent past.
SBC is the majority shareholder of the two largest manufacturers of edible oil in Iran, with a stake of 81.2% in Behshahr Industrial Development Company (BIC) and 53.1% in Margarine Manufacturing Company (Margarine). Together the companies commanded a 40% market share in Iran with revenues in excess of US$ 300 million in 2003. Their brands
include Ladan, Nastaran, Bahar, Khorous and Aftab. Both companies are listed on the Tehran Stock Exchange.
This acquisition expands SEO's geographical reach to Iran after entering Egypt, Jordan, Morocco and Sudan. SEO plans to leverage its brands and marketing knowledge to further increase BIC and Margarine's market share in Iran and their
exports to the former Soviet Union Republics.
SEO's President and CEO, Dr. Abdulraouf Mannaa, said: "The SBC joint venture in Iran, our successful entries in Egypt, Jordan, Morocco and Sudan, as well as other current projects in a number of countries, are key components of our strategy to expand outside our historic market in the Kingdom of Saudi Arabia. This will allow us to leverage our internationally famous brands, our marketing savvy and our focus on consumersí satisfaction, competencies that have helped us achieve and maintain a 70% market share in Saudi Arabia."
SEO was advised by SWICORP, a Swiss-headquartered investment banking firm active throughout the Middle East and North Africa. (Menareport.com)
© 2004 Mena Report (www.menareport.com)
