Dubai’s largest listed developer Emaar is to sell its online fashion platform Namshi to e-commerce company Noon for $335.2 million.
Emaar’s board has in principle approved the sale of Namshi, the e-commerce unit of its subsidiary Emaar Malls, to Noon, subject to Noon’s board approval, the company said. in a statement late Friday at the Dubai Financial Market, where its shares are traded.
“Details will be disclosed once Noon’s board approvals are formally received,” Emaar board member Ahmad Al Matrooshi said in the statement.
“The planned divestment is with a related party to the company, noting that the affected board member did not attend or vote at the meeting.”
The United Arab Emirates has seen a significant increase in online shopping, further accelerated by the Covid-19 pandemic.
The country’s e-commerce retail market hit a record $3.9 billion in 2020, growing 53 percent annually, with the sector accounting for 8 percent of the overall retail market, the Chamber of Commerce and Industry reported. Dubai industry.
E-commerce licenses issued by the emirate jumped 63% in the first half of 2021, the economic development ministry said.
Consulting firm AT Kearney estimated that GCC’s e-commerce revenue grew nearly five-fold, from $5 billion in 2015 to $24 billion last year, predicting they will thrive more thanks to a permanent change in consumer behaviors.
Amazon is the largest e-commerce player in the United Arab Emirates, with net sales of around $500 million in 2021, according to data from ecommerceDB.
Namshi was second with $249 million, while Noon, the portal backed by Emaar founder Mohamed Alabbar and the Saudi Public Investment Fund, followed with $169 million.
“The prize will be a cash consideration of $335.2 million,” Emaar told DFM.
“The cash consideration above is the equity value of Namshi, which is equivalent to $350 million of the enterprise value of the company. This is adjusted for enterprise level debt and normalized working capital requirement.
Emaar will receive the equity value in consideration for the sale, the statement added.
The DFM had suspended trading in Emaar shares on Friday morning until it received clarification from the company on the results of its board meeting.
The company first bought a 51% stake in Namshi for $151 million in 2017 from Rocket Internet’s Global Fashion Group. He then acquired the remaining stake in the online fashion retailer for $129.5 million.
Emaar Malls’ full acquisition of Namshi came two years after it made an 11-hour bid to acquire rival platform Souq.com, which was eventually sold to Amazon for $580 million in 2017.
Mr Alabbar launched the billion-dollar e-commerce platform Noon with the help of Saudi Arabia’s sovereign wealth fund in 2017.
Last week, Emaar agreed to acquire the entire Port of Dubai Creek from Dubai Holding for 7.5 billion dirhams.
Updated: August 22, 2022, 03:14