Philip Morris’ United Tobacco is eyeing a minority stake in state-owned Eastern Company, Asharq Business reports, citing two unnamed government sources. No details were given about the exact size of the stake or the value of the offer on the table. However, one source is quoted as saying that the state is keen to ensure it maintains its controlling stake — as has been a common theme in the government’s privatization talks so far.

Who owns what? As it currently stands, the state owns a 51% share of Eastern Company through its Chemical Industries Holding Company. South African investment company Allan Gray holds some 7.2%, while the employee shareholders’ union owns 5.2%. The remaining shares are traded on the Egyptian Exchange.

Eastern Company already works closely with United: Eastern agreed to purchase a 24% stake in United Tobacco for EGP 100 mn last year. The acquisition is part of the agreement the Philip Morris subsidiary struck with Eastern Company to locally manufacture cigarettes, making United the country’s second tobacco manufacturer. United Tobacco was the only company to bid in the tender after other companies complained that the conditions of the tender would establish a monopoly over the local market.

This isn’t the first time we hear that gov’t is looking to sell down its stake: A local media report in June said an Emirati state institution was interested in snapping up a 25-30% stake in Eastern Company from the state before the end of that month, though we haven’t heard any more on that transaction since. Eastern Company is not on the list of the 32+ companies the government has earmarked for asset sales under its privatization program.

Market reax: Shares in Eastern Company rose 1.4% to close at EGP 18.25 on Monday.

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