Souq.com sells online payment arm CashU

Sold to local investors amid an uptick in mergers and acquisitions despite the region’s economic woes.

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Souq.com, one of the region’s largest e-commerce businesses, has sold its online payment arm CashU to local investors amid a uptick in mergers and acquisitions (M&A) despite the region’s economic woes.

CashU is an online payment platform shoppers use to buy from stores on the internet. Dubai-based souq.com did not disclose the value of the deal.

CashU’s general manager Thaer Suleiman and Dubai-based investment firm Genero Capital bought the business, which has operated in the Mena region since 2003.

“We already have a mobile payment business in our portfolio and we believe adding CashU ... would really complement the payments platform, and we could now look after the region,” said Rushdi Sammakieh, the vice president at Genero Capital. This acquisition, Genero Capital’s biggest, is expected to be followed next year with up to three deals, he said.

Regional M&A rose this year despite the crash in the price of oil and economic slowdown in energy-exporting countries in the Arabian Gulf region, the main regional M&A players.

In the first nine months of this year, the value of M&A in the Mena region reached US$33.7 billion, up 23 per cent from the year earlier period, according to a report from Thomson Reuters and Freeman Consulting.

The findings of the report are in broad agreement with M&A activity handled by two law firms operating in the region. Chris Lester, an Abu Dhabi-based counsel with Latham & Watkins, said: “This was a very good year for M&A activity in the Middle East, particularly in the second half of the year. If the oil price continues to fall, we may see a decline in confidence and scaling back of deal-making.”

This week, oil hit this week an 11-year low of just more than $36 a barrel, a level that will drive M&A players to be more selective in deal-making, particularly domestic parties who may not have easy access to cash.

“People will be opportunistic next year rather than the market encountering a lot of M&A,” said Mr Sammakieh.

Domestic and inter-Middle Eastern M&A decreased 2 per cent year on year to $8.5bn in the first nine months of this year, while inbound M&A rose 154 per cent to $4.6bn.

dalsaadi@thenational.ae