Riyadh – Mubasher: United International Transportation Company (Budget Saudi) has acquired Al Jazira Equipment Company (AutoWorld), a SEDCO Holding-owned vehicle leasing company.
The transaction anchors Budget Saudi’s strategic objectives to expand in a dynamic market poised for healthy growth, according to a press release.
A total of 7 million ordinary shares paid in full will be issued by Budget Saudi to SEDCO Holding and are expected to start trading. The new shares represent 8.96% of Budget Saudi’s share capital after a capital increase.
AutoWorld’s shares will be transferred from SEDCO Holding to Aljozoor Alrasekha, a Budget Saudi wholly-owned subsidiary.
Fawaz Danish, President and Group CEO of Budget Saudi, said: “The strategic acquisition of AutoWorld provides a robust platform for future growth opportunities, bolstered by the strong KSA real economy, structural changes in the transportation sector, and the flourishing tourism industry.”
“This deal, the first of its kind in Budget Saudi's history, enables us to lay the groundwork for strategic initiatives that drive sustainable growth, enhance competitiveness, and create shareholder value,” Danish added.
Through this acquisition, Budget Saudi will reinforce its position as a market leader in the long-term vehicle rental and leasing market across the Kingdom.
A credible third-party market report highlighted that the acquisition will increase the company’s market share from nearly 12% to around 18%.
AutoWorld’s fleet size of approximately 14,000 vehicles brings Budget Saudi’s total car leasing fleet to 49,300 according to the figures registered in 2023.
The process also reinforces Budget Saudi's business-to-business (B2B) and business-to-government (B2G) segments market share.
Following the transaction, the Tadawul-listed firm plans to integrate its Payless brand, a short-term car rental business, with AutoWorld to tap into more price-conscious customers, growing its customer portfolio.
The acquisition will unlock cost synergies, lower redundancies, and achieve economies of scale, leading to enhanced profitability in the mid to long-term.
The shareholders of Budget Saudi approved the capital raise for the acquisition process during the extraordinary general meeting (EGM), while the Capital Market Authority (CMA) greenlighted the 9.84% capital raise last May.
