Al-Futtaim To Acquire 49.95% Stake In Cenomi Retail, Strengthening Saudi Arabia's Retail Sector

Al-Futtaim, a diversified private business group well-regarded in the region, has agreed to purchase a 49.95% interest in Cenomi Retail from its founding shareholders for SAR 44 per share. This deal amounts to more than SAR 2.5 billion.

The stakeholders selling their shares include Fawaz Abdulaziz Alhokair, Abdul Majeed Abdulaziz Alhokair, Salman Abdulaziz Alhokair, Saudi FAS Holding Company, and FAS Real Estate Company. This significant investment demonstrates Al-Futtaim's confidence in Saudi Arabia's economic landscape and aligns with the nation's Vision 2030 objectives to diversify its economy and attract external investments.

In this transaction, Cenomi Retail, Saudi Arabia's premier retail brand partner, stands to gain not only a substantial financial boost but also a wealth of retail expertise from Al-Futtaim. The group's vast experience spans several sectors, including automotive, real estate, and healthcare, with a strong presence in the Middle East, Asia, and Africa.

Notably, Al-Futtaim operates exclusive Inditex brands like Zara and Massimo Dutti in Malaysia, Thailand, and Singapore. This collaboration is expected to enhance Cenomi Retail's operations and cement its position in Saudi Arabia's vibrant retail market.

Fawaz Abdulaziz Alhokair, representing the sellers, highlighted the transaction's pivotal role in redefining Cenomi Retail's financial and operational landscape. By securing a stronger financial foundation, the company aims to foster sustainable growth, thereby increasing value for its shareholders. Al-Futtaim's significant retail expertise and financial resources are anticipated to be instrumental in Cenomi Retail's future success.

Omar Al Futtaim, Vice Chairman and CEO of Al-Futtaim, articulated his organization's investment as a testament to their confidence in Saudi Arabia's economic future and its Vision 2030. This move signifies a major foreign direct investment from the UAE's private sector, reinforcing the economic ties between the two nations. Al-Futtaim's commitment to Cenomi Retail is expected to facilitate operational improvements, accelerate digital transformation, and expand the brand portfolio within the Saudi market.

Salim Fakhouri, CEO of Cenomi Retail, emphasised that the partnership with Al-Futtaim marks a significant milestone on their strategic journey towards growth. He noted that Al-Futtaim's involvement would leverage their proven expertise, further establishing Cenomi Retail's market leadership and promising enhanced returns for shareholders.

The agreement also entails Al-Futtaim providing a shareholder loan of no less than SAR 1.3 billion to Cenomi Retail, aiming to bolster the latter’s balance sheet and facilitate its growth ambitions. This financial support is a crucial condition for the deal's completion, underscoring Al-Futtaim's role as a strategic shareholder committed to Cenomi Retail's long-term success.

The transaction is currently awaiting approval from regulatory authorities, including the General Authority for Competition in Saudi Arabia, among other customary conditions. Both parties have engaged financial advisors, with Lazard acting for Cenomi Retail and J.P. Morgan for Al-Futtaim, to ensure smooth transaction proceedings.

Following the deal's finalisation, Al-Futtaim plans to collaborate closely with Cenomi Retail's management and board. Their aim is to drive operational efficiencies, enhance customer offerings, and generate significant shareholder value, marking a new era for retail in Saudi Arabia.

This strategic partnership between Cenomi Retail and Al-Futtaim paves the way for an exciting future, with the promise of bringing scalable, high-performing global brands to the forefront of Saudi Arabia's retail sector. Through this collaboration, both entities are set to achieve sustainable growth and deliver compelling shareholder returns, aligning with the broader economic goals of Saudi Arabia.