Budget Saudi CEO says AutoWorld takeover to benefit both companies

Fawaz Danish, CEO of Budget Saudi

United International Transportation Co.’s (Budget Saudi) acquisition of Al Jazira Equipment Co. Ltd. (AutoWorld) will bring numerous benefits to both companies, including better price negotiation due to their car fleet purchasing power and a diverse customer base, especially in long-term rentals, CEO Fawaz Danish said.

In an interview with Argaam on the sidelines of the HSBC GCC Conference 2024 in London, he disclosed that the company plans to transfer the short-term rental product to AutoWorld if the deal goes through after shareholders’ approval.

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The acquisition process will help Budget Saudi secure financing on better terms and reduce costs, including insurance expenses, Danish added.

He also revealed that upon completion of the deal, Budget Saudi will own more than 50,000 cars, which is an “unprecedented” number for any company in the Middle East and Africa, noting that the company is seen as the world’s largest franchise in car rental as it continues to grow.

The CEO stated that the company conducted due diligence tests and evaluation procedures within eight months. He pointed out that the share-swap deal will see the issuance of seven million shares, representing the total value of acquiring AutoWorld, which will be distributed among its two companies.

The acquisition will be done through Aljozoor Alrasekha Trucking Co. (Rahaal), wholly owned by Budget Saudi Arabia.

Meanwhile, Danish expects the Saudi market to witness a rapid growth in short-term leasing, pointing to the strong market environment.

According to data compiled by Argaam, Budget Saudi signed a non-binding memorandum of understanding (MoU) last August with the Saudi Economic and Development Holding Co. (SEDCO) to fully acquire its subsidiary, AutoWorld, by issuing shares to the subsidiary owner.

The company set June 24 for the extraordinary general meeting (EGM), during which shareholders will vote on the board of directors’ recommendation to raise capital by issuing new shares, to acquire AutoWorld.