Amazon is looking to expand its roots in the Middle East with a billion dollar acquisition of Dubai-based online retailer Souq.com, reports Bloomberg. This move comes on the heels of the company’s efforts to conquer and kill competition across the globe. It has recently been aggressively pushing to expand in the Indian and Chinese markets, with the launch of the Prime service last month among a host of other rapid launches.
Instead of the 30 percent stake which Souq had initially planned to make available for sale, Amazon is considering to buy out the complete business, mention anonymous sources aware of the development. Both the e-tailers have initiated talks about the acquisition but no final agreements have been reached. There is still the possibility of talks falling through or Souq going for just a stake sale as planned. Goldman Sachs has been appointed as the mediator and instructed to find buyers for the business.
Founded in 2005 by Ronaldo Mouchawar, Souq.com is the largest online retailer in the Arab world. Much like every other e-commerce store, the website offers more than 1.5 million products across categories such as such as consumer electronics, fashion products, and household goods. Operating both an online retail store and a marketplace, it is often referred to as the ‘Amazon of the Middle East.’
One of the primary reasons why the American behemoth might be pursuing this deal is because of the volume of transactions performed on Souq’s platform. The website says that it attracts more than 23 million users per month and caters to the needs of local markets – Egypt, Kingdom of Saudi Arabia and Kuwait. Souq has managed to snag $425 million via four funding rounds which saw participation from Naspers, Tiger Global Management, International Finance Corporation, Standard Chartered, and others.
The details of the transaction are a bit scarce but we’ve contacted Amazon as well as Souq.com for further details. We’ll update you once we receive word.