UAE-based retail distribution company GMG has acquired retail chain aswaaq from the Investment Corporation of Dubai, the principal investment arm of the emirate's government.
The acquisition adds 11 community malls and 22 supermarkets to GMG’s retail network, it said on Monday.
GMG also acquired aswaaq's companies operating in retail, trading and properties.
The value of the transaction was not revealed.
“Such acquisitions go beyond monetary value,” said Mohammad Baker, deputy chairman and chief executive of GMG.
“It is about our vision to serve the communities better, to cover the entire food consumption chain from 'farm to fork' and, ultimately, to bring value to the customers.”
The UAE's retail sector is booming, with sales forecast to rise at a compound annual growth rate of 5.1 per cent between 2022 and 2026, according to a report by Alpen Capital.
Renewed growth is expected in the industry largely due to the expected rebound in economic activity, as well as a population increase, tourism revival and the rising adoption of digital technology, the report said.
“Regional governments are also making significant investments to enhance the leisure and entertainment sector while also enhancing the tourism and hospitality infrastructure as it witnesses [an] influx of tourists post the pandemic,” Alpen Capital said.
Consumer spending in the UAE jumped 20 per cent on annual basis in the first nine months of 2022 despite inflation concerns, Majid Al Futtaim said in its State of the UAE Retail Economy report in November.
Retail spending grew by 15 per cent annually in the nine-month period while non-retail spending rose 29 per cent over the same period, it said.
GMG, which currently manufactures, distributes and retails brands across the sports, food and health sectors, is expanding its portfolio.
In April last year, the company acquired the UAE operations of Geant from Urban Foods by Dubai Holding, adding 18 hypermarket and supermarket outlets to its network.
Currently, its consumer goods division manages the Franprix, Monoprix and Geant brands.
“Our acquisitions and expansions come with a purpose-driven objective — to contribute to the UAE government’s National Food Security Strategy and enhance and add value to our consumers’ well-being,” Mr Baker said.
“We aim to take the concept of community malls to greater heights by nurturing the surrounding communities, regularly engaging with them and creating opportunities for the local communities to thrive.”
GMG has so far introduced more than 120 brands, including Sun & Sand Sports, Dropkick, Supercare Pharmacy, Farm Fresh, Klassic, Nike, Columbia, Under Armour, Timberland and Vans.
The company employs about 8,700 people across all its units, with its workforce estimated to grow by about 10 per cent after the latest acquisition.
Overall, GMG has announced plans to double its global workforce by 2025.
“We believe that aswaaq and its employees will thrive and grow under the guidance of a diversified family owned business … where aswaaq will play the leading role in GMG’s push to become the main player in UAE food retail,” said Khalifa Al Daboos, deputy chief executive of ICD.