Dubai – Decypha: Amazon.com Inc has agreed to fully acquire Dubai-based Souq.com, the Middle East’s top online retailer.
The company has walked away from the deal earlier this year; however agreed to go back to the negotiating table earlier this month, according to Bloomberg.
Souq.com has been valued last February as worth $1 billion, the same amount previously stated as the value of the deal. However, officially the value of the deal has not been disclosed. However, sources told Reuters that the value of the deal is less than that amount. According to Bloomberg the deal is valued at $650 million only.
To date, Amazon’s largest deal was its acquisition of a live-streaming gaming network Twitch, which it bought in 2014 for $970 million.
The Dubai-based company has a market share of 78% of all e-commerce traffic in the Mena region, and represents 2% of all regional retail sales, according to the National.
Scott Jacobson, formerly a senior manager at Amazon, explained to Reuters that the deal is appealing to Amazon, as the lack infrastructure in the Middle East.
"Mobile device penetration is quite high" in the Middle East, particularly for smartphones, Jacobson said. "Pair that with a significant population and healthy GDP per capita in countries like Saudi Arabia and in the UAE, and those factors make it an interesting market."
Founded in 2005, Souq.com started as an internet auction site linked to the Arabic-language portal Maktoob. In 2011 the company repositioned itself as an online retailer and marketplace for third-party vendors.
By Decypha News Editorial Team
