Egypt Watch

Cleopatra’s acquisition of Alameda Group raises concerns about the UAE influence in Egypt

On Wednesday, the Board of Directors of the Egyptian Competition Protection Authority and the Prevention of Monopolistic Practices in Egypt initially rejected the acquisition by the UAE-owned Cleopatra Group of the Alameda Healthcare Group for fear of negative effects on the health care sector in the country.

The agency justified its decision by saying that it came in order to prevent the establishment of monopolistic entities in the hospital market in Egypt and the harm that would follow from the health care of the Egyptian citizen and raise its prices. The agency informed the Ministry of Health and Population of the deal’s potential effects, explaining that the initial study of the multi-specialty hospital market in Cairo and Giza’s governorates indicated that the deal would create a monopolistic entity in the health care market. He pointed out that this would happen by consolidating the Cleopatra company’s dominance over the first- and second-class hospitals within Cairo and Giza’s governorates at the latest, as it is a separate concerned market.

In his speech to the Minister of Health, Dr. Hala Zayed, the board of directors indicated that this would negatively affect Egypt’s private health care sector by raising medical services prices, decreasing their quality, and weakening potential or desired investment opportunities in this sector. It will also raise the prices of medical services provided to the state, given the possibility of private sector hospitals participating in the comprehensive health insurance system and mandatory emergency services.

Among other negative effects, the control of Cleopatra company over the medical competencies of doctors and various medical teams, and control over their wages because there is no alternative or strong competitor that can be replaced by Cleopatra in the event that it acquires the closest competitor, which is Alameda Healthcare Company. The merger deal was expected to be concluded within days, between the two groups, estimated at between 450 million and 500 million dollars, to be one of the largest health care deals in Africa and the Middle East for 2020.

The rejection of that deal comes when there are increasing reports that the Egyptian-Emirati alliance is exposed to significant tensions due to differences between the two countries over several files. During the last years, The Egyptian regime welcomed the Emirati investments without conditions. However, the recent rejection may be the first sign of a new policy.