The Saudi Arabian vehicle leasing giant, United International Transportation Co., also recognized as Budget Saudi Arabia, has obtained approval from the nation’s regulatory body for competition to proceed with its full acquisition of Al-Jazira Equipment Co., popularly referred to as Auto World.
Disclosed through a communication on the Saudi Stock Exchange, the General Authority for Competition has granted a ‘no objection’ certification for Budget Saudi Arabia’s complete takeover of the operational lease and car maintenance enterprise.
The approval follows the company’s announcement on December 24 detailing the completion of a share exchange agreement to fully acquire Auto World by augmenting its capital with the issuance of new shares to the sellers of the company.
Previously, in August 2023, a non-binding memorandum of understanding was signed by Budget Saudi Arabia to acquire all shares of Auto World, with stocks being issued to its owners, the Saudi Economic and Development Co. (SEDCO).
In a prior disclosure, the vehicle leasing company indicated plans to raise its capital from SAR 711.66 million ($189 million) to SAR 781.66 million by issuing 7 million shares. This action is set to increase its share quantity from 71.17 million to 78.17 million, reflecting a 9.84 percent capital hike.
The company further noted that the share purchase would total SAR 455 million, corresponding to 300,000 units, which equals 100 percent of Auto World’s capital.
The acquisition is slated to be executed through Aljozoor Alrasekha Transportation Co. Ltd, known as Rahal, which is fully owned by Budget Saudi Arabia.
For valuation purposes, the six-month volume-weighted average trading price from February 24 to August 24, 2023, was used. Following this evaluation, the fair market value of the rental service provider was estimated to be SAR 4.62 billion, equating to SAR 0.65 per share.