Investment firm Adeptio, which is headed up by Dubai Emaar Properties chairman Mohammed Alabbar, has agreed to purchase the Al-Kharafi family’s stake in Kuwait Food Company, commonly known as Americana. The speculated US$2bn (€1.79bn) deal, reported by Bloomberg based on anonymous sources, would represent a 13% premium over the stake’s US$1.77bn (€1.58bn) market value at the time the sale was announced.
Last week Americana’s board gave Adeptio 60 days to complete due diligence on the acquisition. Kuwait’s market regulator must also approve the deal before it can go ahead, according to the country’s state news agency.
‘Bright future for Americana’
“Americana is a leading food group with a long and successful history, and we are delighted to have the opportunity to be part of Americana’s rich legacy that was built over the past five decades. We see a bright future for Americana and look forward to working with management to realise the significant growth potential in the business going forward,” said Alabbar.
Americana board member Loay Jassim Al Kharafi said: “This represents an important milestone for Americana. We have no doubt that under Alabbar’s leadership Americana will be able to reach new heights as the leading food and quick service restaurant group in the region.”
The deal was slightly marred by the dismissal of three Goldman Sachs employees involved in the transaction, amid allegations two of them misrepresented themselves at a meeting with Americana, according to Bloomberg. Goldman Sachs is advising Alabbar and other investors on the transaction, and is also reported to be helping the investors raise US$2bn (€1.79bn) for the purchase.
The end of a long road?
If the deal completes, it will mark the end of a highly protracted sale process which has been surrounded by rumour and speculation from the start. Reports that the Al-Kharafi family’s Al Khair investment firm was looking to sell its two-thirds stake in Americana in the spring of 2014 were initially denied, then later confirmed – sparking a series of bids.
As talks dragged on with no apparent movement, Reuters quoted anonymous insiders as saying the sale was in trouble, as buyers failed to meet the price the Al-Kharafi family demanded. Just over a year ago Americana had to put out a statement confirming the sale was still going ahead.
Potential buyers included investment companies KKR & Co, CVC Capital Partners, TPG Capital Management and Advent International Corp, along with Saudi food conglomerate Savola, which eventually teamed up with Singapore’s Temasek, but to no avail.
Brazil’s BRF had previously been in talks to form a joint venture with Americana, but later denied it was in the running to buy the firm. BRF’s CEO said it would only consider a deal if Americana became “a reasonably dead chicken”.
Americana is one of the largest food producers in the GCC, with a wide range of retail food products, particularly frozen meat. The firm also holds a large number of major international restaurant franchises, including KFC, Pizza Hut and TGI Fridays.