Emaar Malls joins race for Souq

DUBAI: Dubai’s Emaar Malls PJSC, operator of glitzy Middle East shopping centres, has made an $800 million offer for regional online retailer Souq.com, setting up a potential bidding war with Amazon.com.

Reuters reported last week that Amazon had agreed in principle to buy Souq.com. The US e-commerce giant declined to comment, and Souq.com did not respond to emailed comment requests.

The Emaar Malls bid has so far not been accepted by Souq.com’s shareholders, the firm said in a bourse statement yesterday.

“If successful, the bid would give Emaar a firmer footing in retail and consumer behaviour,” said Sanyalaksna Manibhandu, head of research at NBAD Securities.

The Emaar Malls bid is the latest move by Dubai billionaire Mohammed Alabbar who chairs Dubai’s largest publicly-listed developer Emaar Properties PJSC. Emaar Malls is the retail unit of Emaar Properties.

Alabbar last year raised $1 billion from regional investors including Saudi Arabia’s Public Investment Fund to set up his own Middle East e-commerce firm Noon.

Leading up to the announcement of plans for Noon, Alabbar and Amazon founder Jeff Bezos met in Dubai, leading to speculation of some sort of partnership between the two.

Announced to launch with 20 million products, Noon quietly missed its January launch date.

Acquiring Souq.com would give Emaar access to infrastructure and assets, including in wealthy Saudi Arabia and the United Arab Emirates, “basically driving out the case of competition from a local player and customer retention in the region,” Euromontior research analyst Rabia Yasmeen said in an email.

Emaar Malls is the operator of Dubai Malls, which accounts for around 50% of the emirate’s luxury goods spending and is one of the Middle East’s largest shopping centres.

Alabbar has made other investments into technology and e-commerce — buying a stake in regional logistics firm Aramex PJSC last year and in the process of setting up a joint-venture with Yoox Net-a-Porter after buying a 4% stake in the Italian online retailer for €100 million last April.

He also has plans to develop a Middle East phone messaging service similar to the popular smartphone application Whatsapp.