Al Othaim's planned 51% acquisition of Manuel Market to strengthen foothold: CEO

Muaffaq Mubarah, CEO of Abdullah Al Othaim Markets Co.

Abdullah Al Othaim Markets Co.'s planned acquisition of a 51% stake in Manuel Market would strengthen its foothold in Saudi Arabia, particularly in Western Province — which is deemed a key growth market in the local retail sector, CEO Muaffaq Mubarah told Argaam.

Mubarah explained that the possible stake buyout in Manuel Market, being a luxury supermarket retailer, is seen to enable Al Othaim to tap a broader customer base, including those seeking premium and imported products.

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However, this potential stake acquisition, according to the top executive, should not imply that Al Othaim puts sole focus on the luxury retail segment. It should rather reflect its aspiration to provide diverse options that cater to various customer needs.

The CEO further stated that the memorandum of understanding (MoU) between Al Othaim and Manuel Markets studies Al Othaim’s acquisition of a 51% stake in Ebdaa Al Qasr Marketing LLC, Manuel Markets’ operator, along with assuming its management responsibilities.

Regarding financing, Mubarah emphasized that Al Othaim maintains strong financial statements and positive cash flows. It is evaluating all the available funding options, including self-financing, borrowing, or both.

He added that the expected merger will enhance operational efficiency by integrating supply chains and leveraging Al Othaim’s strong logistics infrastructure. This shall in turn positively impact both companies’ financial and operational performance.

As for post-acquisition debt restructuring, Mubarah confirmed that Al Othaim boasts a solid financial position, with its loan balance amounting to about SAR 330 million as of the latest financial statements — equivalent to just two weeks of sales. He also confirmed no plans to restructure existing debt.

Al Othaim is currently working on completing the necessary regulatory procedures to finalize the planned acquisition deal, with the financial and legal due diligence estimated to take around 90 days.

On business performance in Egypt, the CEO noted that Al Othaim's Egypt-based branches are still achieving sustainable growth. He emphasized the company’s commitment to investing in improving customer experience and expanding its branch network.

He highlighted that Egypt's retail sector offers myriad expansion opportunities. Therefore, Al Othaim is working to boost its market share in the North African country through competitive offerings and enhanced services that align with consumer expectations.

According to data available on Argaam, Al Othaim signed on Feb. 27 a MoU with Abdulilah Ahmed Al-Darwish and Al-Musbah Global Trading Co. to acquire 51% of Ebdaa Al Qasr Marketing, which is a consumer and food products retailer, operating through 11 Manuel Market-branded branches in Jeddah and Riyadh.