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Amazon (AMZN) to Buy Souq.Com, Expands in the Middle East
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Online retail giant, Amazon.com Inc. (AMZN - Free Report) , has agreed to acquire a Dubai-based ecommerce giant, SOUQ.com. The terms of the deal are yet to be revealed.
However, according to media, the buyout is expected to cost less than $800 million which was recently offered by a rival bidder, Dubai's Emaar Malls, a unit of Emaar Properties. The deal is expected to close in 2017, subject to conditions.
More Details
Souq.com is a Dubai-based online retail service. The company features more than 8.4 million products to customers in the United Arab Emirates, Egypt and Saudi Arabia and reportedly attracts more than 45 million visits per month.
Goldman Sachs, the financial adviser for the transaction, called the deal "the biggest-ever technology M&A transaction in the Arab world," as per Reuters.
Though the company has been successful in penetrating more or less every region across the world, it still has a long way to go before gaining a foothold in the Middle East and Africa. Amazon does not have a presence in the Middle East. This deal will mark the company’s first move toward exploring this market.
The Middle East covers approximately 50 million consumers across several countries. Despite that, only about 2% of all retail expenditure is made online, according to a McKinsey report. Hence, there is a good chance of Amazon capturing a significant share of this untapped market in the next few years.
Undoubtedly, the deal will help Jeff Bezos’s company to make its presence felt in key and emerging markets like Egypt, Saudi Arabia, and the UAE. This will see the company’s revenues growing by a few billion dollars in the future.
Stock Price
Amazon is one of the largest online retailers in the world, with extensive operations in North America. Although the primary product line was books, the company has diversified into a host of other product categories and now wants to have a global presence.
The company’s share price was $856 per share as of Mar 28, 2017, up 1.9% since its fourth-quarter earnings release in Feb 2, 2017. Shares of Amazon steadily trended up over the last one year. The stock generated returns of 44.50% compared with the Zacks Electronic Commerce industry’s gain of 37.09%.
We expect the aforesaid announcement to further boost investors’ confidence in the stock.
For the current year, estimates for ON Semiconductor were up 7.8% in the last 60 days. Estimates for Analog Devices and Advanced Energy increased 20.4% and 18.2%, respectively, in the same time period.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
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Amazon (AMZN) to Buy Souq.Com, Expands in the Middle East
Online retail giant, Amazon.com Inc. (AMZN - Free Report) , has agreed to acquire a Dubai-based ecommerce giant, SOUQ.com. The terms of the deal are yet to be revealed.
However, according to media, the buyout is expected to cost less than $800 million which was recently offered by a rival bidder, Dubai's Emaar Malls, a unit of Emaar Properties. The deal is expected to close in 2017, subject to conditions.
More Details
Souq.com is a Dubai-based online retail service. The company features more than 8.4 million products to customers in the United Arab Emirates, Egypt and Saudi Arabia and reportedly attracts more than 45 million visits per month.
Goldman Sachs, the financial adviser for the transaction, called the deal "the biggest-ever technology M&A transaction in the Arab world," as per Reuters.
Amazon.com, Inc. Price and Consensus
Amazon.com, Inc. Price and Consensus | Amazon.com, Inc. Quote
Benefits of the deal
Though the company has been successful in penetrating more or less every region across the world, it still has a long way to go before gaining a foothold in the Middle East and Africa. Amazon does not have a presence in the Middle East. This deal will mark the company’s first move toward exploring this market.
The Middle East covers approximately 50 million consumers across several countries. Despite that, only about 2% of all retail expenditure is made online, according to a McKinsey report. Hence, there is a good chance of Amazon capturing a significant share of this untapped market in the next few years.
Undoubtedly, the deal will help Jeff Bezos’s company to make its presence felt in key and emerging markets like Egypt, Saudi Arabia, and the UAE. This will see the company’s revenues growing by a few billion dollars in the future.
Stock Price
Amazon is one of the largest online retailers in the world, with extensive operations in North America. Although the primary product line was books, the company has diversified into a host of other product categories and now wants to have a global presence.
The company’s share price was $856 per share as of Mar 28, 2017, up 1.9% since its fourth-quarter earnings release in Feb 2, 2017. Shares of Amazon steadily trended up over the last one year. The stock generated returns of 44.50% compared with the Zacks Electronic Commerce industry’s gain of 37.09%.
We expect the aforesaid announcement to further boost investors’ confidence in the stock.
Zacks Rank and Stocks to Consider
Amazon carries a Zacks Rank #2 (Buy). Some other stocks worth considering in the broader technology sector are ON Semiconductor Corporation (ON - Free Report) , Analog Devices (ADI - Free Report) and Advanced Energy Industries, Inc. (AEIS - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
For the current year, estimates for ON Semiconductor were up 7.8% in the last 60 days. Estimates for Analog Devices and Advanced Energy increased 20.4% and 18.2%, respectively, in the same time period.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>