Update: Souq goes to Amazon, and that’s final
27 Mar 2017
Update: Spokesmen of both Amazon and Souq confirmed that Amazon will be the new owner of Souq.com. They didn’t disclose the amount paid by Amazon, but market commentators were in consensus that it was less than the $800 million offered by Dubai-based Emaar Malls. For an excellent summary of the deal, go to Reuters (here).
For the background to the offer by Emaar Malls, continue reading our brief below, dated yesterday.
The deal to sell Souq.com, the Dubai-based online shopping market, took an interesting turn this week when Emaar Malls, the shopping-center arm of property developer Emaar, made an $800-million U.S. offer to buy Souq a few days after Amazon had agreed in principal to purchase it for around $650 million U.S., according to a Reuters report.
Emaar, run by Emirati billionaire Mohamed Alabbar, is narrowing its investment focus on technology, as Alabbar prepares to launch his own e-commerce platform Noon.com, worth $1 billion U.S., with as many as 20 million products. The new marketplace will be 50-percent owned by the Saudi sovereign wealth fund, Public Investment Fund (PIF), while the other 50 percent will be owned by Alabbar and other regional investors.
The offer made by Emaar includes a convertible deposit of $500 million U.S., according to Bloomberg. A final agreement hasn’t been reached with any bidder, according to people familiar with the matter.
AIM Group tried to contact an Emaar spokesman, but he declined to comment, while representatives of Souq.com haven’t replied by publication time.
Amazon recently restarted talks to acquire Souq.com, which was valued at $1 billion U.S. in its last funding round, according to Standard Chartered Plc, an investor in the company. That made Souq the most valuable internet company in the Middle East.
Among Souq.com’s existing investors are Tiger Global Management and South Africa’s Naspers.
Souq, co-founded in 2005 by Syrian entrepreneur Ronaldo Mouchawar, is one of the Middle East’s most recognized online brands, delivering to the six Gulf countries and Egypt. It lists more than 1.5 million (new) products ranging from electronics, to house wares, exercise gear and health and beauty products.
For Souq, the coming days will decide which way it wants to go, but chances of it remaining without a deal are highly unlikely.