RIYADH: Emirati conglomerate Al-Futtaim is to buy a 49.95% stake in Saudi Arabian franchiser Cenomi Retail in a deal worth more than 2.5 billion riyals ($667 million), Cenomi Retail said in a statement on Sunday.
Cenomi Retail’s founding shareholders signed a share purchase agreement with Al-Futtaim with shares priced at 44 riyals each, said the statement.
As part of the share purchase agreement’s completion conditions, the two companies are negotiating a shareholder loan of at least 1.3 billion riyals to boost Cenomi Retail’s balance sheet.
Cenomi Retail is a large franchiser in Saudi Arabia operating food and retail outlets, while Al-Futtaim of the United Arab Emirates is a private business group with operations ranging from financial services to real estate and retail.
“This investment represents substantial foreign direct investment (FDI) from the UAE private sector and underscores the robust economic partnership between our countries,” Al-Futtaim’s Vice Chairman and CEO Omar al-Futtaim said in the statement.
Saudi Arabia has been attempting to boost FDI as part of its Vision 2030 program to diversify the economy away from oil dependency and expand the private sector. ($1 = 3.7509 riyals) (Reporting by Pesha Magid; Editing by Aidan Lewis)
