Arab News, Tue, Apr 16, 2024 | Shawwal 7, 1445
Budget Saudi Arabia to buy 70% stake in UAE freight firm Overseas Development
Saudi Arabia:
Saudi car rental firm United International Transportation Co. is set to acquire
a 70 percent stake in the UAE’s freight forwarder Overseas Development through a
recent deal.
The company, also known as Budget Saudi Arabia,
said in a Tadawul statement that the purchase amount was based on the financial
evaluation of the acquisition and came in at 13.34 million dirhams ($3.63
million).
The new sale and purchase agreement comes
following the company’s announcement in March that it will procure 70 percent of
Overseas Development LLC’s shares in its subsidiaries in Saudi Arabia, UAE, and
Kuwait as part of a memorandum of understanding signed at the time.
In February, the vehicle leasing company was given
the go-ahead by the Kingdom’s competition watchdog to acquire Al-Jazira
Equipment Co.
In a Saudi Stock Exchange statement, it was
revealed the General Authority for Competition had issued a no-objection notice
regarding Budget Saudi Arabia’s complete purchase of the operational lease and
car maintenance company, also known as Auto World.
In 2023, the firm’s net profit after zakat and tax
stood at SR277 million ($73.89 million), reflecting a 10 percent surge compared
to 2022 figures.
The increase in net profit in 2023 compared to the
previous year was due to maximizing the utilization of the firm’s expanding
fleet, both in short-term and long-term rentals. This, coupled with the
increased sale of used car units compared to 2022, significantly propelled
revenue growth.
In August 2023, Budget Saudi Arabia signed a
non-binding memorandum of understanding to acquire all shares of Auto World by
issuing stocks to its owner, the Saudi Economic and Development Co., known as
SEDCO.
Budget Saudi is the holder of the largest Budget
International franchise. The company has provided its services for over 45 years
while building a diverse customer base and operating a fleet of more than 35,000
vehicles.
The firm also offers various transportation
services throughout the Kingdom, including long-term and short-term car rental
and the sale of used cars.