In a significant strategic move reflecting the dynamism of the food and beverage sector in Saudi Arabia, Sultan Food Company, listed on the Saudi Stock Exchange, announced the signing of an agreement to acquire 100% of Simple Burger, a burger chain. The total value of the deal reached SAR 23.8 million, representing a major boost to Sultan Food Company's expansion plans in the thriving fast-food market.
According to the company's official statement on the Saudi Stock Exchange (Tadawul), the deal will be paid in three installments after all agreed-upon conditions are met. The company clarified that the acquisition will be financed through its internal resources, reflecting its strong financial position and ability to capitalize on promising investment opportunities. The agreement is currently subject to obtaining the necessary regulatory approvals from the relevant authorities, as well as approval from the company's Ordinary General Assembly, particularly given the indirect interest of the Chairman of the Board, Aref Al-Misbahi, and the CEO, Majid Al-Misbahi, due to their familial relationship with the owner of "The Simple Burger" establishment.
General context: Rapid growth in the Saudi restaurant sector
This acquisition comes at a time when Saudi Arabia’s food and beverage sector is experiencing unprecedented growth, driven by the economic and social transformations spearheaded by Vision 2030. A young population, rising disposable income, and changing lifestyles have all contributed to increased demand for fast-food and trendy restaurants. The burger market, in particular, has become highly competitive, with major international brands vying for dominance alongside innovative local brands that have successfully built a broad customer base thanks to their quality and unique offerings.
Strategic importance and impact of the deal
The strategic importance of this deal lies in its enabling Sultan Food, known for its meat products, to expand vertically and directly enter the end-consumer services sector. This move is expected to diversify the company's revenue streams and strengthen its brand. For Simple Burger, a promising new brand that has proven successful since its launch in late 2022, joining a larger entity like Sultan Food will provide the financial support and operational expertise necessary to accelerate its growth plans and geographic expansion both within the Kingdom and internationally.
Domestically, competition in the burger market is expected to intensify, potentially benefiting consumers in terms of quality and innovation. The deal is also expected to have a positive financial impact on Sultan Food's performance upon completion and final approvals, enhancing its market value and investor confidence. Simple Burger is a restaurant in a phase of gradual growth and expansion, having started with a single branch and continuing its expansion with the opening of a second branch in early 2024. The restaurant is focused on strengthening its market presence and improving operational efficiency to support its future plans.
