Global unit buys major stake in Saudi retailer

Kuwait City: The Private Equity Group of Global Investment House (Global) announced yesterday the completion of the acquisition of a controlling stake in Al Sawani Food and Industrial Supply Company.

The Global Buyout Fund and its associates yesterday concluded the legal and regulatory requirements of the acquisition of Al Sawani, a Saudi-based retailing giant with over 550 outlets spread across 12 regional countries.

"We are very proud to announce the completion of this transaction. Our investment clearly demonstrates our faith in the company's management and our strong conviction in the company's future," said Omar Al Quqa, executive vice-president at Global.

Forerunner

Established in 1976, Al Sawani is a forerunner in regional retail, and is among the first GCC businesses which adopted the franchising model. The company was established by members of the Hafiz family, who will continue to hold almost 40 per cent of its share capital. Al Sawani currently has 76,000 square metres of retail space through which it retails its portfolio of 36 international apparel and accessories brands including Guess, Benetton, Sfera and Esprit.

"We are very bullish on retailing." Shailesh Dash, senior vice-president at Global Investment House said. "Fuelled by regional liquidity, and a burgeoning young population, retail in the GCC and the wider Middle East and North Africa (Mena) region is poised for sizeable growth."

Saudi Arabia intends to be among the top 10 competitive nations in the world by 2010 and is expecting multi-billion investments into the kingdom. The population of Saudi Arabia grew at a compounded annual growth rate of 2.48 per cent during 2002-06, which is one of the highest growth rates in the world. Saudi Arabia has been encouraging both the private and the foreign players to invest and become party to the country's growth with the most recent initiative been the signing of the WTO agreement.