Dubai’s biggest listed developer Emaar is to sell its online fashion platform Namshi to e-commerce company Noon for $335.2 million.
Emaar’s board of directors has in principle approved the sale of its subsidiary Emaar Malls’ e-commerce unit Namshi to Noon, subject to the approval of Noon’s board of directors, the company said in a statement late on Friday to Dubai Financial Market, where its shares are traded.
“Detailed information will be disclosed once the approvals of Noon's board is received formally,” Ahmad Al Matrooshi, an Emaar board member, said in the statement.
“The planned divestment is with a related party to the company, noting the concerned board member did not participate or vote in the meeting.”
The UAE has witnessed a significant surge in online shopping, accelerated further by the Covid-19 pandemic.
The country’s e-commerce retail market hit a record $3.9 billion in 2020, growing 53 per cent annually, with the sector accounting for 8 per cent of the overall retail market, the Dubai Chamber of Commerce and Industry reported.
E-commerce licences issued by the emirate jumped 63 per cent in the first half of 2021, the Department of Economic Development said.
Consultancy AT Kearney estimated that GCC e-commerce revenues surged almost fivefold from $5bn in 2015 to $24bn last year, predicting that this will thrive further thanks to a permanent change in consumers’ behaviours.
Amazon is the largest e-commerce player in the UAE, with net sales of about $500m in 2021, data from ecommerceDB shows.
Namshi was second with $249m, while Noon, the portal backed by Emaar founder Mohamed Alabbar and Saudi Arabia’s Public Investment Fund, was next with $169m.
“The price shall be a cash consideration of $335.2m,” Emaar's statement to the DFM said.
“The above cash consideration is the equity value of Namshi, which is equivalent to $350m of the company’s enterprise value. This is adjusted for debt at the company level and normalised working capital required.”
Emaar will receive the equity value as cash consideration for the sale, the statement added.
The DFM had suspended trading on Emaar shares on Friday morning until it received clarification from the company about the results of its board of directors meeting.
The company first bought a 51 per cent stake in Namshi for $151m in 2017 from Rocket Internet’s Global Fashion Group. It later acquired the remaining stake in the online fashion retailer for $129.5m.
Emaar Malls’ full acquisition of Namshi came two years after it made an 11th-hour bid to acquire rival platform Souq.com, which was eventually sold to Amazon for $580m in 2017.
Mr Alabbar launched the $1bn e-commerce platform Noon with the help of Saudi Arabia’s sovereign wealth fund in 2017.
Last week, Emaar agreed to fully acquire Dubai Creek Harbour from Dubai Holding for Dh7.5bn.