Amazon to Acquire Souq.com?
As people might be aware, previously, Amazon had walked away from the bid to acquire UAE’s e-commerce website Souq.com. But, now the U.S. tech giant has agreed for the acquisition. According to the reports from Bloomberg, Amazon was found to have restarted its acquisition talks earlier this month for $650 million. It’s to be noted that the deal was called off during January due to the disagreement in the acquisition price. Not only Amazon, the other bidders including Flipkart, all have pulled out from the $1 billion bid.
Now, a complete acquisition of Souq.com has been undertaken by Amazon according to the National reports. According to Reuters, Amazon is found to have agreed on this acquisition in principle. This firm accounts for almost 78% of the total e-commerce sales in the Middle East, as well as in the North African region.
In the previous bidding, the firm was valued at $1 billion in the final funding round during which it raised up to $275 million from its investors including Standard Chartered. But, the deal was to worth less than the valuation done. The existing investors of the firm include Tiger Global Management and Naspers Ltd.
It has been found that the Souq.com had been estimated to experience a tough year following the announcement of noon.com, a one-billion-dollar rival platform backed by the giant investors like the billionaire Mohamed Alabbar and the Saudi Public Investment Fund. But, the noon.com didn’t keep its promise of its launch during January and there’s no update about the launch till date.
The reason why Amazon has been attracted to the bid of Souq.com is because of the lack of its regional presence when compared to the Indian markets.
According to the statements of Colin Sebastian, the research analyst, Amazon will be more careful in approaching this business by making use of the incredible lessons learned from its past acquisition of Joyo.com.
Souq.com is a popular e-commerce site of UAE, which is currently offering as many as 8.4 million products after the company expanded its sales into books and groceries. Not only is it operating in UAE, but also in Egypt, Saudi, and Kuwait. Shipping is found to be available to the neighboring countries like Oman, Bahrain, and Qatar. The current value of regional market of Souq.com was found to be around $20 billion during last year. Overall, it’s said to be a good pick for Amazon.