Savola will finance 100 million Saudi riyals ($26.67 million) to buy the equivalent of 212 million Taameer shares.
Muhammad Kashgari, Savola’s pesident for retail and real estate, said this transaction complies with the company’s expansion plans in real estate. For the moment, the group has no intention to raise its stake in Taameer beyond 5 per cent.
Savola, which owns 30 per cent in Saudi Kinan International Real Estate Development Co., also wants to benefit from Taameer’s experience in developing housing projects for low-income households.
Khaled al-Wazani, general manager of Taameer Jordan, said that Savola’s interest in the Jordanian firm was part of a wider strategic partnership the two firms were discussing – one that will focus on joint projects in Saudi Arabia and the region.
Taameer was set up last year by a group of local businessmen, funds and Arab Gulf investors, including Kuwait’s Global Investment House. Its initial public offering was oversubscribed 14 times and raised over $1 billion.
Many Gulf investors flush with oil revenue are seeking opportunities in the Jordanian market, attracted by free market policies and relatively lower prices of assets compared with other regional markets.
Savola plans to invest 18 billion riyals to expand in North Africa and Central Asia, and for developing new businesses, including supermarket retailing.