DUBAI: Amazon’s acquisition of online retail site Souq.com marks a “coming-of-age” of the Middle East ecommerce sector, technology experts said.
Souq plans to expand its workforce and operations after the US market leader clinched a deal to buy 100 percent of the Middle East player, executives from both firms said.
Amazon had walked away from talks with Souq.com earlier this year, but it reportedly came back with an offer of $650 million.
Amazon and Souq.com said earlier on Tuesday they had agreed on the takeover, despite an eleventh-hour bid by Dubai billionaire Mohamed Alabbar’s Emaar Malls to cut in with an offer it said was worth $800 million.
Executives have not disclosed the value of the Amazon deal, which adviser Goldman Sachs called “the biggest-ever technology M&A transaction in the Arab world.”
Sources with knowledge of the takeover said Amazon was paying less than Emaar’s offer, making it lower than Souq.com’s $1 billion valuation when it sought funding last year.
One source said Souq.com would have broken an exclusivity agreement with Amazon if it accepted Emaar’s bid at this stage.
“Amazon is a great fit with us. We have a lot of common values and it is all about innovation, technology and the type of customer experience and thinking that Amazon has,” Souq.com Co-Founder and Chief Executive Ronaldo Mouchawar told Reuters.
Technology expert Matthew Reed, practice leader for the Middle East and Africa at Ovum in Dubai, said that the deal was significant.
“The Amazon deal to buy Souq.com marks a coming-of-age moment for e-commerce in the Middle East,” Reed told Arab News.
“Currently, e-commerce in the region is less advanced than might be expected the given the relative affluence and high levels of broadband connectivity in the GCC states. But the arrival in the region of a global leader such as Amazon should help to develop and grow the e-commerce sector here.”
The deal will help grow an already major player in the Middle East online retail sector. Alabbar himself has advanced plans for the launch of Noon, slated as a $1 billion portal that will have a big initial focus on fashion and luxury products.
“Assuming the deal goes ahead, Noon will face tougher competition than it might have been expecting, as in Amazon it will be up against what many see as the world’s leading e-tailer,” Reed said.
P.K. Gulati, a Dubai-based technology investor, said that the Amazon-Souq deal was “awesome”.
“I think it’s great for the ecosystem — it’s great as a role-model deal, in the sense of people thinking that they can do it,” Gulati – who has made about 15 investments worldwide, mainly in Silicon Valley and India – told Arab News.
It was also remarkable given Amazon’s track record in business, he added. “Amazon has a reputation of not buying companies — rather, of making them.”
Gulati said that Alabbar’s unsuccessful 11th-hour bid for Souq simply came too late.
“Putting a counter-bid on a Friday was in my opinion probably too late… I think the deal was already done already by then.”
Noon may become a future player in the space, but such sites typically take some time to take off, Gulati added. It typically “takes three to five years for a platform to stabilize and become something which people like,” he said.
Souq.com, founded in 2005, stocks 8.5 million items on its website and generates about 50 million monthly visits, the site’s CEO Mouchawar told Reuters. It delivers to the six Gulf Arab states and Egypt.
Mouchawar said there was scope to expand the business with Amazon and to increase the 3,000-strong workforce to boost Souq.com’s reach, without saying by how many it would rise.
“We will continue to invest in our segment and grow our markets,” he said at Souq.com’s Dubai headquarters.
Despite its young, tech-savvy population, shoppers in the Middle East still prefer to shop in stores. Online retail accounts for less than 1 percent of total sales in the Middle East, according to market researcher Euromonitor International.
“We want to figure out how to grow the team here. If we’re going to grow the business we have to grow logistics, we have to grow technical development,” Amazon Senior Vice President Russ Grandinetti said.
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.”
After the Amazon takeover, Middle East consumers will be able to buy products available on Amazon.com through Souq.com, and Middle East merchants will have access to a wider market via Amazon’s network.
The acquisition is expected to close later this year.
Souq.com’s current shareholders include South Africa’s Naspers Ltd. and Tiger Global Management.
The Amazon deal was backed by the Dubai government, which wants to use technology to expand its regional retail footprint.
Dubai’s Crown Prince Sheikh Hamdan bin Mohammed bin Rashid Al-Maktoum said in a statement it showed the city state’s position “as a regional and global hub for the world’s biggest and leading organizations.”
Amazon’s acquisition of Souq.com is seen as significant for the Middle East’s nascent tech sector.
“This is effectively a vote of confidence in the region. You have a major American company going into a digital company in the region,” said Fadi Ghandour, founder Dubai-listed logistics firm Aramex and a prominent venture capitalist in the Middle East.
— With Reuters
Amazon deal to buy Souq.com a ‘coming-of-age’ of Mideast ecommerce
Amazon deal to buy Souq.com a ‘coming-of-age’ of Mideast ecommerce
US military launches strikes in Syria against Daesh fighters after American deaths
- “This is not the beginning of a war — it is a declaration of vengeance,” Defense Secretary Pete Hegseth says
- President Trump earlier pledged “very serious retaliation” but stressed that Syria was fighting alongside US troops
WASHINGTON: The Trump administration launched military strikes Friday in Syria to “eliminate” Daesh group fighters and weapons sites in retaliation for an ambush attack that killed two US troops and an American interpreter almost a week ago.
A US official described it as “a large-scale” strike that hit 70 targets in areas across central Syria that had Daesh (also known as Islamic State or IS) infrastructure and weapons. Another US official, who also spoke on condition of anonymity to discuss sensitive operations, said more strikes should be expected.
The attack was conducted using F-15 Eagle jets, A-10 Thunderbolt ground attack aircraft and AH-64 Apache helicopters, the officials said. F-16 fighter jets from Jordan and HIMARS rocket artillery also were used, one official said.
“This is not the beginning of a war — it is a declaration of vengeance. The United States of America, under President Trump’s leadership, will never hesitate and never relent to defend our people,” Defense Secretary Pete Hegseth said on social media.
President Donald Trump had pledged “very serious retaliation” after the shooting in the Syrian desert, for which he blamed Daesh. The troops were among hundreds of US troops deployed in eastern Syria as part of a coalition fighting the terrorist group.
Trump in a social media post said the strikes were targeting Daesh “strongholds.” He reiterated his support for Syrian President Ahmad Al-Sharaa, who he said was “fully in support” of the US effort to target the militant group.
Trump also offered an all-caps threat, warning the group against attacking US personnel again.
“All terrorists who are evil enough to attack Americans are hereby warned — YOU WILL BE HIT HARDER THAN YOU HAVE EVER BEEN HIT BEFORE IF YOU, IN ANY WAY, ATTACK OR THREATEN THE USA.,” the president added.
The attack was a major test for the warming ties between the United States and Syria since the ouster of autocratic leader Bashar Assad a year ago. Trump has stressed that Syria was fighting alongside US troops and said Al-Sharaa was “extremely angry and disturbed by this attack,” which came as the US military is expanding its cooperation with Syrian security forces.
Syria’s foreign ministry in a statement on X following the launch of US strikes said that last week’s attack “underscores the urgent necessity of strengthening international cooperation to combat terrorism in all its forms” and that Syria is committed “to fighting Daesh and ensuring that it has no safe havens on Syrian territory and will continue to intensify military operations against it wherever it poses a threat.”
Daesh has not claimed responsibility for the attack on the US service members, but the group has claimed responsibility for two attacks on Syrian security forces since, one of which killed four Syrian soldiers in Idlib province. The group in its statements described Al-Sharaa’s government and army as “apostates.” While Al-Sharaa once led a group affiliated with Al-Qaeda, he has had a long-running enmity with Daesh.
Syrian state television reported that the US strikes hit targets in rural areas of Deir ez-Zor and Raqqa provinces and in the Jabal Al-Amour area near Palmyra. It said they targeted “weapons storage sites and headquarters used by Daesh as launching points for its operations in the region.”
Trump this week met privately with the families of the slain Americans at Dover Air Force Base in Delaware before he joined top military officials and other dignitaries on the tarmac for the dignified transfer, a solemn and largely silent ritual honoring US service members killed in action.
The guardsmen killed in Syria last Saturday were Sgt. Edgar Brian Torres-Tovar, 25, of Des Moines, and Sgt. William Nathaniel Howard, 29, of Marshalltown, according to the US Army. Ayad Mansoor Sakat, of Macomb, Michigan, a US civilian working as an interpreter, was also killed.
The shooting nearly a week ago near the historic city of Palmyra also wounded three other US troops as well as members of Syria’s security forces, and the gunman was killed. The assailant had joined Syria’s internal security forces as a base security guard two months ago and recently was reassigned because of suspicions that he might be affiliated with Daesh, Interior Ministry spokesperson Nour Al-Din Al-Baba has said.
The man stormed a meeting between US and Syrian security officials who were having lunch together and opened fire after clashing with Syrian guards.
When asked for further information, the Pentagon referred AP to Hegseth’s social media post.
