Dubai’s Al-Futtaim agreed to pay 2.5 billion riyals ($667 million) for a 49.95% stake in Cenomi Retail, one of Saudi Arabia’s biggest mall operators.
The deal gives the UAE conglomerate a boost to its plans to expand in the kingdom’s retail sector, and liquidity to the selling Al Hokair family. It’s not clear if Al Hokair, whose patriarch Fawaz was detained during a 2017 anti-corruption crackdown, will retain shares in Cenomi once the deal is completed.
Cenomi is undergoing a restructuring after posting losses for three of the past five years. Al-Futtaim is providing a loan to the business to help fund the turnaround plans.
For Al-Futtaim, the acquisition will allow it to rapidly gain a foothold in Saudi Arabia’s growing retail market, leapfrogging other regional mall operators like Majid Al Futtaim and Kuwait’s Mabanee that have spent years building their own shopping centers. Consumer spending has been picking up in the kingdom, driven by higher employment and social reforms.
Al-Futtaim also recently brought Chinese EV maker BYD — in which it also owns a stake — to the kingdom, and has a broad footprint of retail franchises as well as an insurance company in Saudi Arabia.