Retail giant Amazon.com, Inc. (NASDAQ:AMZN) is reportedly set to acquire Dubai-based online retailer Souq.com for up to $1 billion.
Sources close to the matter said that Amazon is getting close to acquiring the entire company:
Seattle-based Amazon is considering a bid for all of the site, which had initially planned to sell a stake of at least 30 percent, the people said, asking not to be identified as the information is private. No final agreements have been reached and negotiations could still falter, the people said.
The move would give Amazon an instant and commanding presence in the Middle East, where it has yet to have any impact. Souq.com sells over 1.5 million different products online to customers in the United Arab Emirates, Saudi Arabia, and Egypt. Like India, the Middle East is seen as an area of explosive ecommerce growth, since the vast majority of shoppers in those densely populated areas still aren’t shopping online.
The company has tapped a familiar Wall Street banker to help it complete a sale:
Souq.com appointed Goldman Sachs Group Inc. to find buyers for a share of the company, people familiar with the matter said in September. The company’s existing investors — Tiger Global Management and South Africa’s Naspers Ltd. — were also weighing selling their holdings, the people had said.
Amazon shares rose $5.18 (+0.66%) to $785.30 in premarket trading Friday. Year-to-date, AMZN has gained 15.42%, easily surpassing the benchmark S&P 500 index’s 8.25% return during the same period.