BinDawood Holding, one of Saudi Arabia's biggest grocery retailers, is buying a majority share in its e-commerce partner International Applications Trading Company as it seeks to capitalise on the higher demand for online shopping.
BinDawood signed an agreement to acquire 62 per cent of IATC through its subsidiary Future Technology Retail, it said in a statement on Sunday to the Tadawul stock exchange, where its shares are traded.
As part of the transaction, Future Technology Retail will make an immediate payment of 107.5 million Saudi Riyals ($29m) to IATC, with additional payments in 2023 and 2026, subject to the achievement of certain revenue milestones.
“The acquisition of a majority stake in IATC is a major step towards enhancing our e-commerce offering and strengthening our omnichannel presence – enabling BinDawood Holding to control the future growth of its business in an increasingly digitally connected world,” Ahmad BinDawood, chief executive of BinDawood said.
“Expanding digital transformation and technical solutions is in line with Vision 2030. Saudi Arabia is among the largest and the fastest-growing e-commerce markets in the region, with e-grocery shopping still in a nascent phase. I am confident that this strategic acquisition will put BinDawood Holding in a prime position to capitalise on the growth of the sector.”
The total grocery retail market in Saudi Arabia is forecast to grow 2.8 per cent annually between 2020 and 2027 to reach 177.5 billion riyals, while total grocery e-commerce penetration is expected to grow to 3.5 per cent by 2027 from 0.8 per cent, BinDawood said, quoting data from Euromonitor and KPMG analysis.
The kingdom's e-commerce market, which grew about 60 per cent in 2019-2020 amid a digital surge that accelerated during the pandemic, is poised to hit $13.3bn by 2025, according to Boston Consulting Group and Meta Platforms.
BinDawood aims to capture 30 per cent of Saudi Arabia’s e-grocery market by 2028 as online sales continue to increase after the pandemic, it said.
As part of the transaction agreement, the founder and the management team of IATC will remain with the company and BinDawood will invest a further 160m riyals in IATC over a two-year period to “support the development of the platforms and the roll-out of a network of state-of-the-art dark stores and fulfilment centres to optimise operations, fully integrate the customer experience and provide shorter lead delivery times,” the company said.
The transaction, subject to customary closing conditions and completion of regulatory approval, is expected to close in the second half of 2022.
The volume of merger and acquisition deals in the Middle East and North Africa surged 66 per cent last year as the region's economies charted a strong recovery from the pandemic.
Last year, 661 transactions worth $99bn were completed, compared with 397 deals worth $85.2bn in 2020, according to Ernst & Young.
The UAE registered the highest deal activity in terms of volume with 303 transactions, while Saudi Arabia attracted the most M&A capital, worth $47.4bn, according to the consultancy. Egypt, the Arab world's third-largest economy, also reported robust activity in 2021 with 118 deals worth $7.7bn.
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
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UAE currency: the story behind the money in your pockets
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Navdeep Suri, India's Ambassador to the UAE
There has been a longstanding need from the Indian community to have a religious premises where they can practise their beliefs. Currently there is a very, very small temple in Bur Dubai and the community has outgrown this. So this will be a major temple and open to all denominations and a place should reflect India’s diversity.
It fits so well into the UAE’s own commitment to tolerance and pluralism and coming in the year of tolerance gives it that extra dimension.
What we will see on April 20 is the foundation ceremony and we expect a pretty broad cross section of the Indian community to be present, both from the UAE and abroad. The Hindu group that is building the temple will have their holiest leader attending – and we expect very senior representation from the leadership of the UAE.
When the designs were taken to the leadership, there were two clear options. There was a New Jersey model with a rectangular structure with the temple recessed inside so it was not too visible from the outside and another was the Neasden temple in London with the spires in its classical shape. And they said: look we said we wanted a temple so it should look like a temple. So this should be a classical style temple in all its glory.
It is beautifully located - 30 minutes outside of Abu Dhabi and barely 45 minutes to Dubai so it serves the needs of both communities.
This is going to be the big temple where I expect people to come from across the country at major festivals and occasions.
It is hugely important – it will take a couple of years to complete given the scale. It is going to be remarkable and will contribute something not just to the landscape in terms of visual architecture but also to the ethos. Here will be a real representation of UAE’s pluralism.
