Aramex ex­pands in Saudi Ara­bia with Saudi Tal ac­qui­si­tion

The National - News - - BUSINESS - SARMAD KHAN

Aramex, the largest courier and lo­gis­tics com­pany in the Mid­dle East, has ac­quired Saudi Tal for Com­merce and Con­tract Com­pany as it ex­pands its op­er­a­tions in the re­gion’s big­gest econ­omy.

The ac­qui­si­tion of Saudi Tal, based in Riyadh, for $80 mil­lion (Dh293.6m) opens more av­enues of growth in the king­dom, which is the big­gest mar­ket for Aramex in the Mid­dle East, the com­pany said yes­ter­day to the Dubai Fi­nan­cial Mar­ket, where its shares are traded.

“Our ac­qui­si­tion of Saudi Tal sup­ports Saudi Ara­bia’s Vi­sion 2030, which aims to en­cour­age pri­vate sec­tor in­vest­ment to di­ver­sify the econ­omy,” said Bashar Obeid, chief ex­ec­u­tive of Aramex.

“This ac­qui­si­tion is also in line with our strat­egy to have leaner and more ef­fi­cient op­er­a­tions in all mar­kets we op­er­ate, and will al­low us to fo­cus on up­grad­ing last-mile de­liv­ery through in­no­va­tive so­lu­tions, which will ul­ti­mately re­sult in an en­hanced cus­tomer ex­pe­ri­ence.”

Es­tab­lished in 1982 as an ex­press courier ser­vice, Aramex has grown its op­er­a­tions to 65 coun­tries.

The com­pany, the first from the Arab world to list on Nas­daq be­fore delist­ing to go pri­vate and later list­ing on the Dubai Fi­nan­cial Mar­ket, is seek­ing growth op­por­tu­ni­ties as it re­aligns its port­fo­lio sub­sidiaries. In De­cem­ber, Aramex said it will sell its stake in a joint ven­ture with Aus­tralia Post for $20m as both com­pa­nies pur­sue op­por­tu­ni­ties in e-com­merce in­de­pen­dently. Aramex con­sid­ers e-com­merce, which in­creased the com­pany’s over­all rev­enue by 19 per cent in 2017, as a strate­gic im­per­a­tive.

Aramex will trans­fer its 60 per cent in­vest­ment in the e-com­merce JV Aramex Global So­lu­tions to Aus­tralia Post, in­cur­ring a $13m one-time write-off that will re­flect in its fourth-quar­ter fi­nan­cial re­sults after the sale is com­pleted.

“The divest­ment will not af­fect our e-com­merce growth strat­egy,” Mr Obeid said. Aramex re­ported a 38 per cent in­crease in third-quar­ter net profit cit­ing growth in its e-com­merce busi­ness. Net in­come in the three months to Septem­ber 30 rose to Dh113m.

The com­pany’s in­ter­na­tional ex­press busi­ness grew due to ex­pan­sion in cross-bor­der e-com­merce across the re­gions where Aramex op­er­ates, par­tic­u­larly in Asia and Tur­key.

The takeover opens more av­enues of growth in the king­dom, which is the big­gest mar­ket for Aramex in the re­gion

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