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E-commerce company Noon has completed the acquisition of online fashion retailer Namshi, with the deal effective immediately.
Namshi will remain a separate entity, drawing on Noon's logistics and fulfilment networks, fleet and in-house e-commerce experts when needed, Noon said on Monday.
The e-commerce platform will continue to support Namshi's growth as an independent entity within the company, it said.
"We know that both Noon and Namshi have a long way to go, but that just means that the opportunity ahead remains immense," said Hisham Zarka, chief technology officer of the Noon Group and co-founder of Namshi.
"This merger will enable Namshi to make deep and long-term investments and in the months and years to come, our customers and partners can look forward to better assortment, pricing and service as these investments are realised."
The completion of acquisition comes after Dubai’s biggest listed developer Emaar Properties received shareholder approval in September 2022 for the sale of its stakes in Namshi to Noon, a company founded by Emirati businessman Mohamed Alabbar.
The deal was sealed with a total cash consideration of Dh1.23 billion ($335.2 million), representing a premium of Dh127 million on the total investment by Emaar Malls Management, a wholly owned subsidiary of Emaar Properties, in Namshi.
The Namshi transaction is in line with Emaar’s strategy to divest assets that are not core to its primary business, and to create and sustain value for its shareholders, Emaar said in August 2022, when the companies entered into a definitive agreement for the sale.
The UAE's e-commerce market is expected to be worth $9.2 billion in 2026, up by about 92 per cent from 2021, as online sales continue to soar in the country, according to a Dubai Chamber of Commerce study.
It also projected, based on data from Euromonitor, that the share of e-commerce in total retail sales will reach 12.6 per cent by 2026.
Growth momentum within the UAE’s e-commerce sector is backed by rising demand for online shopping and steady investment flows in the sector’s infrastructure, the study said.
The acquisition of Namshi will expand Noon’s digital offering of products and services to include more fashion and lifestyle brands for the region's consumers, the e-commerce platform said.
"This acquisition is a great opportunity for both Noon and Namshi," said Dhruv Paul, group general counsel of the Noon Group. "It allows us to reach out to new audiences while offering them unique products."
Credit Suisse and Clyde & Co advised Noon on the acquisition as financial and legal advisers, respectively.
Gulf International Bank arranged acquisition financing for Noon, with Dentons and Baker McKenzie advising Noon and GIB, respectively.