Saudi food delivery firm Jahez has signed a non-binding pact to acquire the online food delivery platform, The Chefz, as it seeks to further strengthen its position in the kingdom’s fast-growing online food delivery business.
The consideration for the proposed transaction will be based on a “due diligence” and will include cash and shares in Jahez, the company said in a regulatory filing to Tadawul, where its shares trade.
“The Chefz’s shareholders shall not, during the terms of this offer, solicit or negotiate any offer or arrangement in competition with the proposed transaction with any third party,” the filing said.
“The online food ordering and delivery market in Saudi Arabia was valued at $511.21 million in 2020 and is expected to grow at a compound annual growth rate of 10.05 percent between 2021 and 2026,” according to a report by Research and Markets.
Last year, Saudi Arabia’s General Authority for Competition rejected Delivery Hero’s takeover offer for The Chefz, without disclosing any details or the reasons for its decision.
Founded in 2016, Jahez is the biggest locally owned food delivery group in Saudi Arabia. The firm made its trading debut in January after pricing its initial public offering at the top end of a planned range. The shares have gained about 24 percent this year, giving it a market value of about $2.9 billion.
The company has over 1.3 million active users and includes over 12,000 merchant branches and more than 34,000 delivery partners in 47 cities across Saudi Arabia.