RIYADH: Vehicle leasing firm United International Transportation Co., known as Budget Saudi Arabia, has been 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.
This came following an announcement by the company on the Kingdom’s bourse on Dec. 24, in which it outlined the inking of a stock exchange agreement for the entire acquisition of Auto World by increasing its capital through issuing new shares to the selling shareholders of the company.
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.
In a previous statement on Tadawul, the vehicle leasing firm explained that its capital would be increased from SR711.66 million ($189 million) to SR781.66 million through the issuance of 7 million shares. This move increases the number of its shares from 71.17 million to 78.17 million shares, marking a 9.84 percent increase in its original capital.
The company noted in its release that the value of the shares to be purchased would total SR455 million, encompassing 300,000 units, constituting 100 percent of Auto World’s company capital.
This acquisition is to be carried out through Aljozoor Alrasekha Transportation Co. Ltd, known as Rahal which is wholly owned by Budget Saudi Arabia.
For the purpose of the acquisition deal, the firm’s valuation was calculated using the volume-weighted average price for six trading months from Feb. 24 to Aug. 24, 2023.
Following this assessment, the fair market value of the rental service provider was outlined to be SR4.62 billion, representing SR0.65 per share.
