Amazon has clinched an agreement to acquire 100 percent of Souq.com, the Middle East’s biggest online retailer, for an undisclosed amount.
The deal, which will help Amazon expand its reach in a key market, has been described by Goldman Sachs as “the biggest-ever technology M&A transaction in the Arab world”, Reuters reports.
Goldman was an advisor for the transaction, which came after an eleventh-hour bid by Dubai billionaire Mohamed Alabbar’s Emaar Malls to cut in with an offer it said was worth US$800 million.
Reuters cited sources as saying that Amazon is paying less than what Emaar offered, which was below the US$1 billion valuation that Souq.com fetched when it sought funding last year.
Souq.com chose to go with Amazon as a deal with Emaar would have meant breach of an exclusivity agreement with the US online giant, according to the report.
“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 co-founder and CEO Ronaldo Mouchawar told Reuters.
Souq.com, founded in 2005, stocks 8.5 million items on its website and generates about 50 million monthly visits, Mouchawar said. It delivers to the six Gulf Arab states and Egypt.
Mouchawar said there is scope to expand the business with Amazon and to increase the 3,000-strong workforce to boost the Middle East retailer’s reach.
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