Marketing-Börse PLUS - Fachbeiträge zu Marketing und Digitalisierung
print logo

Olympic Group denies Ideal deal was undervalued

Olympic Group denied on Wednesday allegations that its 1997 purchase of Ideal Zanussi from the Egyptian government was undervalued.
03.07.11 | Source: The Daily News Egypt

“Before buying anything from the government, you have to submit a detailed request outlining how much you plan to invest in the company and what you plan to do with it,” said Saad Eldin Abdullah Sallam, chairman of Paradise Capital, the parent company of Olympic Group.

“Our request to them was very detailed; we ended up purchasing Ideal for LE 315 million, but we invested over LE 750 million in just five years time,” he said.

Sallam said Ideal’s worth at the time was estimated at between LE 130 million and LE 450 million, which the government announced publically.

Although Olympic bought Ideal years ago, Egypt’s January 25 Revolution, which forced Hosni Mubarak out of power and put many of his cronies under investigation for corruption and money laundering, caused the history of the transaction to resurface.

Sallam added that Olympic was not involved in the process of valuing the company, a matter that was left completely up to the government.

“We simply bought the company from the government who told us a price,” he added.

According to Niazi Abdullah Sallam, chairman of Delta Industrial Company (Ideal), corruption accusations published in state-owned Al-Ahram newspaper, which stated that the Sallam family was banned from travel and under investigation for the Ideal Zanussi deal, are “inaccurate and false.”

At a time when Olympic Group was seeking different ventures and opportunities to expand in the Egyptian market, the company made a “quick” decision to purchase Ideal.

“In 1995, we started thinking about venturing into other products such as refrigerators and washers different from what we usually produced, which was water heaters,” he said. “Ideal, which was a public share, was on sale at the time.”

“We saw our purchase of Ideal, which was already an established name in the Egyptian market at the time, as a shortcut,” said Sallam.

However, there were problems in the company’s file that Olympic Group did not find out about until recently.

“We bought the company because we thought we could really enhance this product, and serve the Egyptian market,” he said. “It turned out there were issues regarding the company that we did not know about until now.”

FREE NEWSLETTER