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
Syrian president to make first official visit to Kuwait
CAIRO: Syrian President Ahmad al-Sharaa will make his first official visit to Kuwait on Sunday accompanied by an official delegation.
“Syrian President Ahmad Al-Sharaa, accompanied by an official delegation, is due to arrive in Kuwait on Sunday,” read a statement on KUNA News Agency.
Earlier this month, sources close to Al-Sharaa have reported that the Syrian president was planning a strip to the gulf state in the end of May.
On his gulf tour, Al-Sharaa had visited Saudi Arabia, Qatar, Bahrain and the United Arab Emirates.
On his trip to Kuwait, the Syrian president will meet the Kuwaiti leadership to discuss ways to boost bilateral relations.
Iran considers nuclear weapons ‘unacceptable’, FM says
- Iran has held five rounds of talks with the United States in search of a new nuclear agreement
- Western governments have long suspected Iran of seeking to develop a nuclear weapons capability
TEHRAN: Foreign Minister Abbas Araghchi said Saturday that Iran considers nuclear weapons “unacceptable,” reiterating the country’s longstanding position amid delicate negotiations with the United States.
Western governments have long suspected Iran of seeking to develop a nuclear weapons capability to counter widely suspected but undeclared arsenal of its arch-foe Israel.
“If the issue is nuclear weapons, yes, we too consider this type of weapon unacceptable,” Araghchi, Iran’s lead negotiator in the talks, said in a televised speech. “We agree with them on this issue.”
Iran has held five rounds of talks with the United States in search of a new nuclear agreement to replace the deal with major powers President Donald Trump abandoned during his first term in 2018.
The two governments are at odds over Iran’s uranium enrichment program, which Washington has said must cease but which Tehran insists is its right under the nuclear Non-Proliferation Treaty.
Nonetheless, Trump said Wednesday that “we’re having some very good talks with Iran,” adding that he had warned Israeli Prime Minister Benjamin Netanyahu against striking its nuclear facilities as it would not be “appropriate right now.”
Israel has repeatedly threatened military action, after pummelling Iranian air defenses during two exchanges of fire last year.
Trump has not ruled out military action but said he wants space to make a deal first, and has also said that Israel, and not the United States, would take the lead in any such strikes.
Israel strike on south Lebanon kills one
- The Israeli army said the strike killed a regional commander “of Hezbollah’s rocket array"
BEIRUT: Lebanese official media said an Israeli strike killed one person in the south on Saturday despite a six-month-old ceasefire, as Israel said it targeted a Hezbollah militant.
The state-run National News Agency (NNA) said a man was killed when an Israeli drone targeted his car as he was heading to pray at a mosque in Deir Al-Zahrani, about 20 kilometers (12 miles) from the Israeli border.
Israel has continued to bomb Lebanon despite the November 27 truce that sought to halt more than a year of hostilities with Hezbollah including two months of open war.
The Israeli army said the strike killed a regional commander “of Hezbollah’s rocket array.”
It charged that during the conflict, the operative “advanced numerous projectile attacks... and was involved recently in efforts to reestablish Hezbollah’s terrorist infrastructure” in south Lebanon.
Under the terms of the ceasefire, Hezbollah fighters were to pull back north of the Litani River, some 30 kilometers (20 miles) from the border, and dismantle military infrastructure to its south.
Israel was to withdraw all forces from Lebanon but it has kept troops in five areas it deems “strategic.”
The Lebanese army has deployed in the south and has been dismantling Hezbollah infrastructure.
Syrian Kurdish commander in touch with Turkiye, open to meeting Erdogan
BEIRUT: The commander of Kurdish forces that control northeast Syria said on Friday that his group is in direct contact with Turkiye and that he would be open to improving ties, including by meeting Turkish President Tayyip Erdogan.
The public comments represented a significant diplomatic overture by Mazloum Abdi, whose Syrian Democratic Forces fought Turkish troops and Ankara-backed Syrian rebels during Syria’s 14-year civil war.
Turkiye has said the main Kurdish group at the core of the SDF is indistinguishable from the militant Kurdistan Workers Party (PKK), which decided earlier this month to disband after 40 years of conflict with Turkiye.
Abdi told regional broadcaster Shams TV in an interview aired on Friday that his group was in touch with Turkiye, without saying how long the communication channels had been open.
“We have direct ties, direct channels of communication with Turkiye, as well as through mediators, and we hope that these ties are developed,” Abdi said. There was no immediate comment from Turkiye on Abdi’s remarks.
He noted his forces and Turkish fighters “fought long wars against each other” but that a temporary truce had brought a halt to those clashes for the last two months. Abdi said he hoped the truce could become permanent.
When asked whether he was planning to meet Erdogan, Abdi said he had no current plans to do so but “I am not opposed... We are not in a state of war with Turkiye and in the future, ties could be developed between us. We’re open to this.”
The Al-Monitor news website reported on Friday that Turkiye had proposed a meeting between Abdi and a top Turkish official, possibly Turkiye’s foreign minister or its intelligence chief.
A Turkish diplomatic source denied the report, saying “the claims about Turkiye and our country’s authorities” in the story were “not true,” without elaborating.
In December, Turkiye and the SDF agreed on a US-mediated ceasefire after fighting broke out as rebel groups advanced on Damascus and overthrew Bashar Assad.
Abdi in March signed a deal with Syria’s interim President Ahmed Al-Sharaa to incorporate the semi-autonomous administration of northeast Syria into the main state institutions based in Damascus.
On Thursday, Erdogan accused the SDF of “stalling” implementation of that deal.
In the interview, Abdi denied accusations that the SDF was in contact with Israel.
“People have accused us of this. In this interview, I am saying publicly that we have no ties with Israel,” he said.
But he said his group supported good ties with Syria’s neighbors. When asked if that included Israel, Abdi responded, “with everyone.”
Israel blocks Ramallah meeting with Arab ministers, Israeli official says
- Palestinian Authority official says that the issue of whether the meeting in Ramallah would be able to go ahead is under discussion
- The move comes ahead of an international conference due to be held in New York on June 17-20 to discuss the issue of Palestinian statehood
JERUSALEM: Israel will not allow a planned meeting in the Palestinian administrative capital of Ramallah, in the occupied West Bank, to go ahead, an Israeli official said on Saturday, after media reported that Arab ministers planning to attend had been stopped from coming.
The delegation included ministers from Jordan, Egypt, Saudi Arabia, Qatar and the United Arab Emirates, Palestinian Authority officials said. The ministers would require Israeli consent to travel to the West Bank from Jordan.
An Israeli official said the ministers intended to take part in “a provocative meeting” to discuss promoting the establishment of a Palestinian state.
“Such a state would undoubtedly become a terrorist state in the heart of the land of Israel,” the official said. “Israel will not cooperate with such moves aimed at harming it and its security.”
A Palestinian Authority official said that the issue of whether the meeting in Ramallah would be able to go ahead was under discussion.
The move comes ahead of an international conference, co-chaired by France and Saudi Arabia, due to be held in New York on June 17-20 to discuss the issue of Palestinian statehood.
Israel has come under increasing pressure from the United Nations and European countries which favor a two-state solution to the Israeli Palestinian conflict, under which an independent Palestinian state would exist alongside Israel.
French President Emmanuel Macron said on Friday that recognizing a Palestinian state was not only a “moral duty but a political necessity.”
