Amazon clinches deal to
buy Middle East online retailer Souq.com
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[March 28, 2017]
By Hadeel Al Sayegh and Alexander Cornwell
DUBAI
(Reuters) - Amazon.com has agreed to buy Middle East online retailer
Souq.com, thwarting a last-minute bid by Dubai billionaire Mohamed
Alabbar's Emaar Malls.
The value and terms of the agreement, which deal adviser Goldman Sachs
called "the biggest-ever technology M&A transaction in the Arab world",
were not disclosed.
But sources with knowledge of the matter said Amazon was paying less
than Emaar's $800 million offer, making it lower than the $1 billion
valuation at the time of a Souq.com funding round last year.
One of the sources said on Monday Souq.com would have had to break an
exclusivity agreement with Amazon if it had accepted the Emaar Malls
offer at this stage.
Reuters reported last week that Amazon had agreed in principle to buy
Souq.com, which was co-founded 12 years ago by Syrian-born entrepreneur
Ronaldo Mouchawar.
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"By becoming part of the Amazon family, we'll be able to vastly expand
our delivery capabilities and customer selection much faster, as well as
continue Amazon's great track record of empowering sellers," Mouchawar
said in a statement on Tuesday.
In a deal document seen by Reuters, Goldman said the acquisition would
accelerate Amazon's entry into "attractive Middle East countries with
significant growth potential given e-commerce only represents (roughly)
2 percent of retail sales".
The deal was endorsed by the Dubai government, which is increasingly
focusing on technology, as the emirate expands its retail footprint in
the region.
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An Amazon.com Inc driver stands next to an Amazon delivery truck in
Los Angeles, California, U.S., May 21, 2016. REUTERS/Lucy
Nicholson/File Photo
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Dubai's Crown Prince Sheikh Hamdan bin Mohammed bin Rashid al-Maktoum said it
showed the city state's position "as a regional and global hub for the world’s
biggest and leading organizations".
The acquisition is expected to close later this year, according to the joint
statement on Tuesday.
For Alabbar, who made his name as chairman of Emaar Properties, the Dubai
government-linked developer of the world’s tallest building, losing out on
Souq.com is unlikely to crimp his ambitions to move into e-commerce.
He announced last year he planned to launch his own e-commerce firm Noon in
partnership with Saudi Arabia's Public Investment Fund, a sovereign wealth fund.
Emaar Malls, the retail unit of Emaar Properties, is the operator of the Dubai
Mall, which accounts for around 50 percent of the emirate's luxury goods
spending and is one of the Middle East's largest shopping centers.
![](http://archives.lincolndailynews.com/2017/Mar/28/images/ads/current/atlantanationalbank_sda_072114.png)
South Africa's Naspers Ltd, which has a 36.4 percent stake in Souq.com, has
declined to comment on the Amazon deal. Tiger Global Management also has a stake
in Souq.com.
(Editing by Edmund Blair and Susan Thomas)
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