A last-minute bid by Dubai billionaire Mohamed Alabbar's Emaar Malls EMAA.DU was thwarted by US based online retailer Amazon.com as the largest online retailer in the world agreed to buy Middle East online retailer Souq.com.
Deal adviser Goldman Sachs called the deal to be "the biggest-ever technology M&A transaction in the Arab world" but any details about the value and terms of the agreement were not disclosed any of the companies.
Souq.com had been valued at $1 billion during a funding round last year and Emaar had made an offer of $800 million for the deal. However Amazon reportedly has agreed to pay less than both those amounts, said sources with knowledge of the matter.
If Souq.com had accepted the Emaar Malls offer at this stage, the Saudi company would have had to break an exclusivity agreement with Amazon, one of the sources reportedly told the media on Monday.
Souq.com had been co-founded 12 years ago by Syrian-born entrepreneur Ronaldo Mouchawar and there were media reports last week that Amazon had agreed in principle to buy the company.
"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.
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", Goldman said in a deal document.
And as the emirate expands its retail footprint in the region, the Dubai government is increasingly focusing on technology, and the deal was endorsed by the Dubai government.
It showed the city state's position "as a regional and global hub for the world’s biggest and leading organizations", said Dubai's Crown Prince Sheikh Hamdan bin Mohammed bin Rashid al-Maktoum.
According to the joint statement issued on Tuesday, the acquisition is expected to close later this year.
Losing out on Souq.com is unlikely to crimp Alabbar’s ambitions to move into e-commerce. This Dubai government-linked developer is the creator of the world’s tallest building ad had made his name as chairman of Emaar Properties EMAR. In partnership with Saudi Arabia's Public Investment Fund, a sovereign wealth fund, he planned to launch his own e-commerce firm Noon he announced last year.
One of the Middle East's largest shopping centers and accounting for around 50 percent of the emirate's luxury goods spending is Dubai Mall which is operated by Emaar Malls which is the retail unit of Emaar Properties.
Declining to comment on the deal was South Africa's Naspers Ltd which has a 36.4 percent stake in Souq.com. Tiger Global Management also has a stake in Souq.com.
(Source:www.reuters.com)
Deal adviser Goldman Sachs called the deal to be "the biggest-ever technology M&A transaction in the Arab world" but any details about the value and terms of the agreement were not disclosed any of the companies.
Souq.com had been valued at $1 billion during a funding round last year and Emaar had made an offer of $800 million for the deal. However Amazon reportedly has agreed to pay less than both those amounts, said sources with knowledge of the matter.
If Souq.com had accepted the Emaar Malls offer at this stage, the Saudi company would have had to break an exclusivity agreement with Amazon, one of the sources reportedly told the media on Monday.
Souq.com had been co-founded 12 years ago by Syrian-born entrepreneur Ronaldo Mouchawar and there were media reports last week that Amazon had agreed in principle to buy the company.
"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.
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", Goldman said in a deal document.
And as the emirate expands its retail footprint in the region, the Dubai government is increasingly focusing on technology, and the deal was endorsed by the Dubai government.
It showed the city state's position "as a regional and global hub for the world’s biggest and leading organizations", said Dubai's Crown Prince Sheikh Hamdan bin Mohammed bin Rashid al-Maktoum.
According to the joint statement issued on Tuesday, the acquisition is expected to close later this year.
Losing out on Souq.com is unlikely to crimp Alabbar’s ambitions to move into e-commerce. This Dubai government-linked developer is the creator of the world’s tallest building ad had made his name as chairman of Emaar Properties EMAR. In partnership with Saudi Arabia's Public Investment Fund, a sovereign wealth fund, he planned to launch his own e-commerce firm Noon he announced last year.
One of the Middle East's largest shopping centers and accounting for around 50 percent of the emirate's luxury goods spending is Dubai Mall which is operated by Emaar Malls which is the retail unit of Emaar Properties.
Declining to comment on the deal was South Africa's Naspers Ltd which has a 36.4 percent stake in Souq.com. Tiger Global Management also has a stake in Souq.com.
(Source:www.reuters.com)
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