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Dubai’s GMG buys supermarket and mall operator Aswaaq

The acquisition of Aswaaq makes GMG one of the largest operators of community malls in the UAE Aswaaq
The acquisition of Aswaaq makes GMG one of the largest operators of community malls in the UAE
  • Deal adds 11 community malls and 22 supermarkets to GMG portfolio
  • Company seeks to cover ‘food consumption chain from farm to fork’

GMG, which manages more than 120 retail brands across the Middle East, North Africa and Asia, has announced a major expansion through the acquisition of the retailer Aswaaq.

The Dubai-headquartered conglomerate bought Aswaaq from the Investment Corporation of Dubai, the principal investment arm of Dubai’s government.

The deal adds a total of 11 community malls and 22 supermarkets to GMG’s retail network. The value of the transaction was not disclosed.

The acquisition positions GMG as one of the largest operators of community malls in the UAE. In April, it bought Géant’s UAE operations from Urban Foods by Dubai Holding, adding 18 hypermarkets and supermarkets.

Mohammad A Baker, deputy chairman and CEO of GMG, said: “This acquisition marks a strategic milestone in our operations, as we not only expand our food retail portfolio but also add Aswaaq’s companies operating in retail, trading and properties. 

“Our acquisitions come with a purpose-driven objective – to contribute to the UAE government’s national food security strategy.”

He added: ”We ventured into food retail last year as we want to cover the entire food consumption chain from farm to fork.

“We aim to take the concept of community malls to greater heights by nurturing the surrounding communities, regularly engaging with them and creating opportunities for the local communities to thrive.”

Mohammad A Baker, deputy chairman and CEO of GMG. Picture: GMG

The deal comes just days after global law firm Norton Rose Fulbright predicted that mergers and acquisitions activity would remain buoyant in the Gulf this year.

Norton partner Zubair Mir and counsel Shazi Askarpour said in a research report that M&A activity in 2022 was fuelled by sovereign wealth fund and government-related entity investments – “with neither showing any signs of slowing down”. 

Khalifa Al Daboos, deputy CEO of Investment Corporation of Dubai, said: “We believe that Aswaaq and its employees will thrive and grow under the guidance of a diversified family-owned business with immense experience and a glowing track record in the retail sector, where Aswaaq will play the leading role in GMG’s push to become the main player in UAE food retail.”

GMG’s consumer goods division currently manages Franprix, Monoprix and Géant brands. To date GMG has introduced over 120 brands and has announced plans to double its global workforce by 2025.  

The company employs approximately 8,700 people, with its workforce estimated to grow by around 10 percent after the acquisition.

GMG’s growth is part of a rapid expansion of the UAE’s consumer retail market. The segment is anticipated to grow at nearly 6 percent in the next five years and touch $37.7 billion by 2027 because of the rising per capita income, booming tourism sector, growing number of expatriates and new commercial projects, including malls. 

Consumer confidence among the Gulf’s shoppers remains strong, despite concerns about the impact of a global slowdown and rising prices, according to a survey by management consulting firm Kearney published last month. 

It found that despite concerns about rising inflation, shoppers in the UAE and Saudi Arabia did not intend to reduce their spending over the next six months and around half are planning to make a major household purchase of more than $250.

Kapil Sethi, deputy CEO at GMG, said it was seeing an increase in consumer spending across the region.

“While online shopping continues to surge in the post-pandemic era, we are also seeing the rise of a hybrid retail environment, referred to as ‘phygital’, that has emerged and is set to define the regional retail landscape for years to come.”