Al Ansari Financial Services, the UAE money and exchange company, received initial approval to acquire a majority stake in one of Oman's major exchange companies as part of its plan to expand in the Gulf region.
The acquisition, which is subject to regulatory approvals and due diligence, is expected to be completed in the first quarter of 2024, Al Ansari said on Monday in a filing to the Dubai Financial Market, where its shares are traded.
It did not name the Omani acquisition target.
“The Omani market is very attractive and one that we believe will support our goal of expanding our footprint in countries with a significant expat population and a resilient economy," Rashed Ali Al Ansari, group chief executive of Al Ansari Financial Services, said.
"We are confident that this expansion will contribute to further broadening our customer base."
The planned acquisition in Oman is part of Al Ansari's wider plans to grow its footprint in the Gulf region. The move marks Al Ansari's second foray into the GCC market after entering Kuwait.
Al Ansari Exchange was set up nearly 60 years ago and has 231 branches in the UAE, offering exchange services, remittances, a system to pay domestic workers and savings plans. The company opened its first exchange branch in the UAE in 1966 and also operates in Kuwait.
The UAE is the second-largest outward personal remittances market globally, with a total value of $48 billion, Al Ansari said in March, citing a report by Edgar, Dunn and Company.
Al Ansari registered 22 million personal remittance transactions last year, with the money remitted increasing by 4.8 per cent year-on-year to Dh737 million in 2022.
Remittance flows to poor and middle-income countries are expected to increase by 1.4 per cent to $656 billion in 2023 amid a slowdown in global economic conditions, the World Bank said in June. This comes as economic activity in remittance source countries is set to soften, limiting employment and wage gains for migrants, it said.
India was the top recipient country for remittances last year, receiving funds worth $111 billion, followed by Mexico at $61 billion, China at $51 billion, the Philippines at $38 billion and Pakistan at $30 billion, the Washington-based lender said.
Three in four people in the Middle East who transfer money to loved ones back home expect their volume of remittances to increase over the next 12 months amid rising inflationary challenges for households, according to a March survey by Western Union.
Nearly three quarters of 30,600 consumers said they were transferring more money than in previous years because of economic challenges, such as a higher cost of living around the world, while 79 per cent of receiving consumers said they intended to ask for more money, the poll found.
"The planned acquisition of a prominent exchange in Oman will provide us with the opportunity to bring the best of Al Ansari Financial Services to a new and exciting market," Mr Al Ansari said.
“We are committed to delivering on our strategic road map designed to unlock shareholder value by exploring various growth and expansion opportunities, including inorganic growth through acquiring businesses to gain access to new markets."
The company made its debut on the Dubai Financial Market in April. It drew $3.45 billion in bids for its initial public offering that raised $210 million from the sale of a 10 per cent stake, with the offering oversubscribed 22 times on average.