ICON acquires majority stake in 7 hotels as part of Egypt’s privatization program

CAIRO - 20 December 2023: In a significant move within Egypt's Initial Public Offering (IPO) program, the Arab Company for Tourism and Hotels Investments (ICON), a subsidiary of Talaat Mostafa Holding Group, has successfully completed the acquisition of seven state-owned hotels in Cairo, Alexandria, and Aswan.

The deal was finalized through Legacy Hotels, a newly established company jointly owned by The Sovereign Fund of Egypt's Sub-Fund for Tourism, Real Estate Investment, and Antiquities Development, and the Egyptian General Company for Tourism and Hotels (EGOTH).

Under the agreement, ICON has acquired a 39 percent stake in Legacy Hotels, with the option to subscribe to a capital increase that would ultimately grant them a controlling 51 percent stake.

The total value of the acquisition is estimated to reach $800 million once ICON's ownership percentage in Legacy Hotels reaches the majority threshold. The funding for the deal will come from ICON's internal resources, with an additional capital increase of $882.5 million provided by an international strategic investor.

This landmark transaction represents one of the largest inflows of foreign direct investment into Egypt in recent years. The partnership with a prominent international investor as a shareholder in ICON further solidifies the country's position as an attractive destination for foreign investment.

The seven historic hotels included in the acquisition are the 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. These iconic establishments have long been synonymous with luxury and hospitality, attracting tourists from around the world.

The announcement was made during the Egyptian Cabinet's press conference on Egypt's privatization program at its headquarters in the New Administrative Capital. Egyptian Prime Minister Mostafa Madbouly highlighted the success of the program, revealing that stake sales in 14 companies have generated an impressive $5.6 billion in revenue thus far.

Furthermore, Prime Minister Madbouly unveiled four new priority sectors for private sector engagement: airports, telecommunications, banking, and insurance. These sectors have been identified as key areas for future investment and growth, signaling the government's commitment to fostering a favorable environment for the private sector.