Of privatisations, acquisitions – and investments

By Antonis D. Papagiannidis

The sale of a 49% participation in the Hellenic Electricity Distribution Network Operator/DEDDHE to Macquarie Group for 2.1 bn euros was heralded as a major move forward in the ongoing privatisations programme of Greece. The record sum fetched bye the sale of DEDDHE – with some management participation – will allow the Hellenic Power Company/DEH to use the proceeds for much-needed investment in maintenance and modernization of the power grid; the 2.1 bn may be an important sum for Greece, but they constitute just around 0.6% of Australia-based Macquarie Group’s assets under management in 32 countries around the world.

Some weeks later, the 670 Km Egnatia Motorway crossing the whole of Northern Greece (and opening northwards European Corridors to Belgrade-Vienna, to Sofia-Berlin and to Helsinki) was given in concession to GEK/TERNA and Egis Projects for 2.76 bn euros. As things stand GEK/TERNA the major infrastructure-building concern in Greece, while Egis is a leading French construction multinational controlled by Caisse des Dépôts. Here, too, it is not the price that is of main importance, but the transformation of an important road infrastructure to a real toll-operated motorway: Egnatia has the peculiar characteristic of lacking petrol stations for most of its course; so drivers have the unpleasant experience of leaving the motorway to tank-up, paying further tolls for the privilege.

Some weeks earlier in mid-July, Lamda Development undertook – here too with the participation of GEK/TERNA – a 8 bn euros investment (first phase: 2bn) in a land-development, metropolitan park and integrated casino resort venture in Hellinikon, based on a 99-years lease for a consideration of 915 mio euros. This major urban development project on the site of the old Athens International Airport was lingering for the better part of 15 years, but is now taking off; it is interesting to note that the project was anchored to the casino resort part (led by Mohegan), which reeled under the shock of the corona-virus crisis – but demand for prime housing commercial development and other recreational activities in the “Athens Riviera” kept it going.

Meanwhile, quite vivid a M&A activity in diverse business sectors could be observed in Greece: BC Partners private equity acquired for some 1 bn euros Wind – the third largest telecoms operator in Greece. BC Parners controlled already since 2019 Nova, active in cable TV. Some weeks earlier, BC Partners had sold its stake at Greek pharma group Pharmathen to a Swiss private equity.

Veteran Industrialist Spyros Theodoropoulos sold his controlling stake in snack-company Chipita to Mondlez, a confectionery, food and beverage American multinational for an overall price of 2 bn dollars. Theodoropoulos then invested part of the proceeds to acquire a 21.5% share of milk company MEVGAL.

In the soft-drinks sector, Coca-Cola HBC (a partner of Coca-Cola Company), listed in London and Athens, acquired 95%  of Coca Cola bottling Company of Egypt for 427 mio euros.

In a totally unrelated field, Greek-owned PeopleCert active in the certification of skills bought for 450 mio euros British Axelos . Founded in 2013 as a J.-V. by Capita plc and the UK Cabinet Office to apply digitally enabled practices and advanced project management methods especially for the certification of professional skills, Axelos is quite a move for a Greek company to buy.

In all these privatisations and/or acquisitions, the real question is: what is the bottom-line in fresh,job-creating investments?