U.S. online retail giant Amazon.com quit negotiations to acquire UAE-based online marketplace Souq.com for a speculated $1 billion U.S., reported Bloomberg. AIM Group tried unsuccessfully to get confirmation of the report from Souq.com, and on the way forward for the marketplace.

The question is: will Souq.com continue to look for a buyer of a stake, or shelve all plans?

Souq.com lists more than 1.5 million (new) products ranging from electronics, to house wares, exercise gear and health and beauty products. It operates in seven countries in the Middle East, including the UAE, Egypt and Saudi Arabia.

Amazon started talking to Souq.com last November, after the Dubai-based marketplace had appointed Goldman Sachs to find buyers for a stake earlier in the year. Current investors in Souq.com include Tiger Global Management and South Africa’s Naspers.

Amazon reportedly hoped for a big footprint in the region, and was looking to acquire all of Souq.com, which initially planned to sell only a 30-percent stake.

The online retailer, which runs on more or less the same business model as Amazon.com, became the highest-valued internet company in the Middle East after a $275-million U.S. funding round in February 2016, according to Standard Chartered, which has invested in Souq.com.

However, Souq’s position in the regional e-commerce market is being challenged by well-funded competitor Noon.com, which is backed by UAE billionaire Mohamed Alabbar and Saudi’s Arabia Public Investment Fund. Alabbar promised to dominate Middle East e-commerce with the firm, which is expected to launch this month.

Alabbar is also leading a $1-billion U.S technology investment company formed with other regional investors, and plans to start a social-media messaging service similar to WhatsApp.

Print Friendly, PDF & Email

Related Articles