Al-Futtaim Starts CMC Shares Acquisition
News: UAE-based Al-Futtaim Group has officially opened its proposal to acquire the entire share capital of Kenyan car retailer CMC Holdings. The proposal now allows CMC's existing shareholders to sell their stake to Al-Futtaim, which will acquire CMC through its subsidiary Al-Futtaim Auto & Machinery Company. The proposal has already been supported by 50.6% of CMC shareholders, who are required to sell their shares to Al-Futtaim by January 24 2014.
BMI View: CMC owns dealerships in Kenya, Tanzania and Uganda, which means this is not just a domestic demand play for Al Futtaim, it is also looking at the wider region. It is also looking beyond just CV potential, as CMC also has a number of passenger cars in its portfolio. While Al Futtaim's investment and experience will be useful to CMC in building its business, the deal will be mutually beneficial in giving the Dubai-based group a foothold in Africa. The group has businesses in a number of sectors and Marwan Shehadeh, group director for corporate development at Al Futtaim, said the deal was the first step in an African expansion drive.