DUBAI: Tech giant Amazon expanded its global reach Tuesday with the announcement of a deal to buy Souq.com, the Middle East’s largest online retailer.
The agreement, the financial details of which were not disclosed, brings Amazon into a fast-growing market as it continues to invest in its core retail network despite expanding into a wide range of services.
It appears competition was fierce to acquire Souq.com, with the Amazon deal announced just a day after Dubai-based Emaar Malls confirmed offering $800 million to acquire the site.
Amazon had walked away from talks with Souq.com earlier this year, but it reportedly came back with an offer of $650 million.
Founded in 2005 as an auction site, Souq.com has evolved into a retailer and a marketplace for third-party sellers. The company says it attracts more than 24 million unique visits per month.
In a joint statement announcing the agreement, the two companies said the deal would be finalized this year “subject to closing conditions.”
Souq.com chief executive officer and co-founder Ronaldo Mouchawar called the agreement “a critical next step in growing our e-commerce presence on behalf of customers across the region.”
“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,” he said in the statement.
Amazon senior vice president Russ Grandinetti said the deal made sense as both companies “share the same DNA.”
“We’re both driven by customers, invention and long-term thinking,” he said.
“We’re looking forward to both learning from and supporting them with Amazon technology and global resources.”
Souq.com won a major vote of confidence last year and emerged as the highest-valued Internet company in the region when it secured $275 million in funding from international investors to support its growth.
At the time, Mouchawar said the e-commerce market in the Middle East was “growing very fast” and expected to reach $20 billion in 2016.
Souq.com attracts over 45 million visits per month.
Known for its huge online retail operations, Amazon has been expanding into areas including cloud computing and streaming video where it is trying to rival Netflix.
But retail remains at its core, with its retail operations taking in $26 billion in North America and $14 billion in the rest of the world in the last quarter of 2016.
Amazon expands global reach with Souq.com buy
Amazon expands global reach with Souq.com buy
Closing Bell: Saudi equities continue 4-day upward trend
RIYADH: Saudi equities closed higher on Wednesday, with the Tadawul All Share Index rising 51.52 points, or 0.47 percent, to finish at 10,945.15.
Trading activity was robust, with 373.9 million shares exchanged and total turnover reaching SR6.81 billion.
The MT30 Index also ended the session in positive territory, advancing 11.93 points, or 0.82 percent, to 1,472.82, while the Nomu Parallel Market Index declined 116.82 points, or 0.49 percent, to 23,551.47, reflecting continued volatility in the parallel market.
The main market saw 90 gainers against 171 decliners, indicating selective buying.
On the upside, Al Kathiri Holding Co. led gainers, closing at SR2.18, up SR0.12, or 5.83 percent. Wafrah for Industry and Development Co. advanced to SR23, gaining SR0.99, or 4.5 percent, while Al Ramz Real Estate Co. rose 4.35 percent to close at SR60.
SABIC Agri-Nutrients Co. added 4.21 percent to SR118.70, and Al Jouf Agricultural Development Co. climbed 4.12 percent to SR45.
Meanwhile, losses were led by Saudi Industrial Export Co., which fell 9.73 percent to SR2.69. United Cooperative Assurance Co. declined 5.08 percent to SR3.74, while Thimar Development Holding Co. dropped 4.54 percent to SR35.30.
Abdullah Saad Mohammed Abo Moati for Bookstores Co. retreated 4.15 percent to SR48.50, and Gulf Union Alahlia Cooperative Insurance Co. slipped 3.96 percent to SR10.44.
On the announcement front, Saudi National Bank announced its intention to issue US dollar-denominated Additional Tier 1 capital notes under its existing international capital programe, with the final size and terms to be determined subject to market conditions and regulatory approvals.
The planned issuance aims to strengthen Tier 1 capital and support the bank’s broader financial and strategic objectives.
The stock closed at SR42.70, gaining SR0.70, or 1.67 percent, reflecting positive investor reaction to the capital management move.
Separately, Almasane Alkobra Mining Co. said its board approved the establishment of a wholly owned simplified joint stock company to provide drilling, exploration and related support services, with a share capital of SR100 million and headquarters in Najran, subject to regulatory approvals.
The new subsidiary aligns with the company’s strategy to enhance operational efficiency and expand its role in the Kingdom’s mining sector.
Shares of Almasane Alkobra Mining closed at SR98.70, up SR0.30, or 0.3 percent, by the end of the session.
