In a significant strategic move reflecting the growing dynamism of the Saudi real estate sector, Retal Real Estate Development Company, a leading company listed on the Saudi Stock Exchange, announced important developments that will increase its stake in Ajdan Real Estate Development Company to 50%. This move follows a series of actions, including Retal's approval of the sale of Sumou International Investment Company's stake in Ajdan.
Deal details and sequence of events
The story began when Retal submitted an offer on February 15 to acquire all the shares of the other shareholders in Ajdan Company. In a significant development, Retal received notification from Abdul Qader Al-Muhaidib & Sons Company, one of the major shareholders, that it did not wish to participate in the acquisition offer for its 47.5% stake in exchange for the issuance of 55 million new Retal shares, affirming its commitment to retaining its stake as a long-term strategic investment.
Subsequently, on February 20, Retal received notification from Al-Fawzan Holding Company that Sumou International Investment had submitted an offer to sell its entire 5% stake in Ajdan for SAR 125 million. This valuation places Ajdan at SAR 2.5 billion, reflecting the high value of its assets and projects. The offer included Ajdan purchasing Sumou's shares (the proposed Sumou transaction). Based on a pre-existing share swap agreement, Retal provided its written consent to the transaction on February 22, paving the way for its completion.
General context and strategic importance
This deal comes at a time when the Saudi real estate sector is experiencing an unprecedented boom, driven by the goals of Vision 2030, which aims to increase homeownership among citizens and diversify the economy. Mergers and acquisitions in this sector are considered a vital tool for creating larger and stronger economic entities capable of executing the mega-projects required in the next phase.
Both Retal and Ajdan are recognized as leading real estate developers in the Kingdom, particularly in the Eastern Province. Ajdan is renowned for its high-quality, luxurious projects, such as the Ajdan Waterfront project in Al-Khobar, a landmark in urban development. By increasing its stake to 50%, Retal strengthens its influence and control over Ajdan's strategic decisions, integrating its portfolio of distinguished projects into its broader sphere of influence.
Expected impact on the market
Domestically, this move is expected to strengthen Retal's competitive position in the real estate development market, particularly in the luxury and mixed-use sectors. It also sends a strong message of confidence in the future of the Saudi real estate sector and its investment appeal. Regionally, this deal highlights the maturity of the Kingdom's business environment and the ability of local companies to conclude complex strategic transactions that reshape the market landscape.
“Retal” indicated that all details of the two deals, the main one and the His Highness deal, will be announced in a circular addressed to shareholders after obtaining the necessary regulatory approvals, thus ensuring full transparency for all concerned parties.
