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Cyril Paolantoni: "Crédit Agricole CIB demonstrates once again its capacity to support Western consumer goods companies in connection with complex acquisitions in emerging markets."
Cyril Paolantoni, Head of Consumer Goods, Global Investment Banking, describes the milestones reached in this significant innovative deal.
What was behind the idea of an alliance between Electrolux and Olympic Group?
In fact Olympic Group, which has a 30% share of the Egyptian market, has been a technical and operational partner of Electrolux for the past 26 years. This partnership has even resulted in a joint brand, Ideal Zanussi, which enjoys solid recognition in the Egyptian market. In 2009, we presented the idea of a deal to Electrolux which had just finished its restructuring in Europe and was ready to seek out new sources of growth.
What are the various steps in this acquisition?
The negotiations between the two companies lasted several months. After approval by their respective Boards of Directors, a memorandum of understanding was signed on October 10, 2010. From November 2010 to January 2011, we led a complete review of due diligence alongside auditors and consultants. We had a dual objective: ensure that the company was well-managed and validate for Electrolux the possibility of leaning on Olympic to develop in the Middle East region.
From February to April 2011, we interrupted the discussions due to the geopolitical context. During this period, Electrolux could maintain the dialogue with the sellers, which has contributed to the success of the transaction.
Negotiations resumed in May and June to finalise the agreement.
On July 10, 2011, Electrolux officially announced the signing of a definitive agreement with Paradise Capital to acquire its controlling 52% stake in Olympic Group. In the coming weeks, Electrolux will launch a mandatory tender offer for the remaining 48% shares in Olympic Group and subsequently sell Olympic Group’s ownership in its two listed subsidiaries Namaa and B-Tech to Paradise Capital.
In what way is this deal significant for Crédit Agricole CIB?
First of all, it is a major cross-border deal between Europe and the Middle East. Few transactions of this size have been carried out between the two regions.
Next the deal is highly visible in the Nordic countries and Electrolux is one of northern Europe’s major companies.
It is also an additional success for Crédit Agricole CIB in Egypt, where the Bank has acted in several major cross-border deals in the last decade. We played a significant role in the Lafarge’s acquisition of Orascom Cement in 2008 which received the Club des Trente prize.
Crédit Agricole CIB has once again demonstrated its ability to assist its western clients with their development strategies in emerging markets. Our clients rely on our sector expertise (in this case consumer goods), and on the Bank’s geographic coverage. In a similar vein, in 2007 we assisted SEB in its takeover bid on the Chinese leader in small household appliances.
Moreover, it confirms the important role played by Crédit Agricole CIB in the field of Investment Banking in the Nordic countries, where the Bank recently advised huge companies like Hexagon, Tele2 and A.P. Møller-Mærsk for major transactions.
This transaction is also proof of the excellent teamwork within the Crédit Agricole group, between Crédit Agricole CIB Investment Banking (Consumer Goods, Nordic countries), Crédit Agricole CIB in Stockholm and Crédit Agricole in Egypt.
