Majid Al Futtaim lines up Egyptian store chain

MAF and the French retail group Carrefour operate 13 outlets across Egypt as part of a joint venture. Above, shoppers at a mall in Cairo. Dana Smillie for The National

Majid Al Futtaim is in advanced talks to buy Egypt's largest supermarket chain.

The Dubai retailer has concluded a due diligence study surrounding the deal to acquire the Metro chain and discount grocery store Kheir Zaman from the Mansour Group.

"We are progressing in the discussion with the counter party and it looks positive," said Daniele Vecchi, the group treasurer of Majid Al Futtaim.

He said he could not give a time frame for the next step, "potentially to finalise the transaction. The outcome of the due diligence was reasonably positive so we are discussing the finer points."

Majid Al Futtaim has expanded rapidly from its Dubai base, where it is known for its City Centre chain, and the Mall of the Emirates with its indoor ski slope. In Cairo, it is building the massive Mall of Egypt, while rival Dubai company Al Futtaim Group is developing Cairo Festival City.

The Mansour Group's retail business is worth US$200 million to $300m and it has been looking to sell Metro and Kheir Zaman since last year, according to Reuters.

Metro has more than 40 outlets, making it one of Egypt's biggest supermarket chains.

Kheir Zaman, a discount grocery brand, employs more than 2,000 people and has 30 stores across the country.

MAF and the French retail group Carrefour operate 13 outlets across Egypt as part of a joint venture. MAF, which owns the exclusive rights to the Carrefour franchise in a total of 19 markets across the Middle East and central Asia, and runs nearly a dozen malls, wants to expand in Egypt through acquisitions, a Dubai-based banking source who is aware of the discussions told Reuters.

MAF signed a lease this month to open the first Carrefour Market, a convenience-sized store, in Abu Dhabi.

The 1,200 square metre store in the AD-1 Tower Project, which is managed by Abu Dhabi Commercial Properties and located in the heart of Adnec's new Capital Centre development, is expected to open within four months.

The chain also intends to open a Carrefour Market at Al Muneera in Al Raha Beach. The two new stores could be followed by more, depending on market demand, said Younis Al Mulla, the senior vice president of retail development at Majid Al Futtaim.

* with Reuters