The e-commerce giant may have competition in its bid for Dubai-based online retailer Souq.com, however, as Emaar Malls has submitted a competing offer, according to reports from multiple media outlets.
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Amazon.com Inc. last week made an offer to purchase Dubai-based online retailer Souq.com, but has since been outbid by Emaar Malls.
E-commerce giant Amazon.com Inc. may have a bidding war on its hands.
As initially reported by Reuters news service, the company last week made an offer to purchase Dubai-based online retailer Souq.com, but has since been outbid by Emaar Malls PJSC, the retail subsidiary of Emaar Properties, Dubai’s largest publicly-traded property development firm.
The reports cite sources familiar with the deal, who said Amazon’s offer was somewhere in the range of $650 million to $750 million, well short of the reported $1 billion valuation placed on Souq.com just two years ago.
Much like Amazon, Souq.com sells everything from electronics to clothing to household items, and according to its website, is the largest e-commerce platform in the Arab world.
In an apparent challenge to the Amazon offer, Emaar Malls’ bid came in at around $800 million, including a convertible deposit of $500 million, per sources.
All of the companies involved have remained tight-lipped about the potential deal, and sources have requested to remain anonymous as the negotiations are confidential.
Amazon had reportedly entered talks to acquire Souq.com earlier this year, but negotiations stalled out due to disagreements over the final asking price. Should it come to fruition, however, the purchase would give Amazon a strong foothold in the Middle Eastern consumer market without having to build the necessary regional workforce and infrastructure from scratch.
According to Standard Chartered Plc, which owns a stake in the company, Souq.com in April 2015 raised $275 million in its latest funding round, bringing its total value to $1 billion and making it the most valuable internet company in the Middle East. Other investors include Tiger Global Management and South Africa’s Naspers Ltd.
In addition to having the largest e-commerce operation on the planet, Amazon has been expanding its interest in transportation and logistics services as a way to ensure capacity even during the busiest times. The company has consistently denied any aspirations to compete with established parcel carriers and logistics providers like UPS, FedEx and DHL, but thanks to its enormous scale and focus on technology and efficiency, rumors persist that it could one day challenge those carriers for third-party volumes, as opposed to simply supplementing them for its own shipments.