Abu Dhabi’s ADQ offers to buy 100% of Aramex

The potential deal values the Middle East’s biggest courier company at about $1.2bn

Aramex shareholders will receive Dh3 a share, which is about 30 per cent higher on its closing price of Dh2.31 on Friday. Silvia Razgova / The National

Abu Dhabi-based investment and holding company ADQ has offered to fully acquire Aramex in a deal that values the largest courier company in the Middle East at about Dh4.39 billion ($1.2 billion).

The UAE’s home-grown courier company has received a formal proposal from Q Logistics Holding, an ADQ subsidiary, to buy all its shares that are not controlled by Abu Dhabi Ports, Aramex said in a bourse filing to the Dubai Financial Market, where its shares are traded.

Abu Dhabi Ports, which is also majority controlled by ADQ, currently owns a 22.69 per cent stake in Aramex.

“This matter will be presented to the company's board of directors and the required procedures will be followed,” Aramex said. “The company will make further announcements with respect to any material developments in the matter in due course.”

According to the intent letter posted on the DFM, Aramex shareholders will receive Dh3 per share which is about 33 per cent premium on Aramex’s last closing price of Dh2.31 on Friday.

Aramex shares surged by as much as 15 per cent, the maximum one-day limit of gains on the bourse, to Dh2.65 on Monday. It was the biggest intra-day rise since October 2023, according to Bloomberg data.

The offer to gain 100 per cent control of Aramex is the latest in a string of deals for ADQ, which is pushing to expand its local and international portfolio of assets.

With total assets worth $225 billion as of June 30, it has shareholdings in more than 25 companies across sectors including energy, utilities, food and agriculture, health care, pharmaceuticals, mobility and logistics. Some of the companies in its portfolio include Abu Dhabi National Energy Company, better known as Taqa, the Emirates Nuclear Energy Corporation, and Abu Dhabi National Exhibitions Company.

Within the transport and logistics cluster, it has a significant asset base including Abu Dhabi Ports, Etihad Airways, Abu Dhabi Airports, Etihad Rail, Wizz Air Abu Dhabi and Abu Dhabi Aviation.

“The offer believes that Aramex is complementary to the existing assets within ADQ’s transport and logistic clusters and, accordingly, Aramex has the potential to play a central role towards achieving ADQ's broader vision and objectives for the wider local economy,” Q Logistics said.

The recent financial performance of Aramex, however, indicates that “a strategic and operational transformation is required to unlock the company's full potential and restore financial stability”, and stem the decline in financial performance since 2019, the company said in the intent letter.

In November, Aramex said its third-quarter profit rose 177 per cent year-on-year to Dh27 million, driven by it international express unit that rose 34 per cent. Revenue for the quarter rose by 18 per cent annually to Dh1.59 billion, it said in a bourse filing at the time.

Q Logistics said the company announced no dividend for 2023, which would suggest a current lack of return for shareholders and “by becoming a majority shareholder and leveraging ADQ's track record of supporting its portfolio companies in developing into global competitive national champions it is well positioned to guide and support the transformation of Aramex”.

The transformation is expected to be a complex capital-intensive exercise that will take time which limits the potential of short to medium term returns for shareholders, Q Logistics said.

“The offer presents a unique and attractive opportunity for shareholders to realise value,” it added.

Established in 2018 and wholly owned by the government of Abu Dhabi, ADQ is an active global sovereign investor.

In October, ADQ signed a definitive agreement with Lebanon's Bank Audi to acquire a 96 per cent stake in Odeabank, the lender’s Turkish subsidiary. The acquisition marked ADQ’s latest move to expand its portfolio in the banking sector and strengthen its presence in Turkey’s growing financial market.

Last year, it became an investor alongside the Bank of Montreal in the Canadian alternative asset management company Sagard. In April, it revealed plans to buy a 49 per cent stake in Melbourne-based Plenary, marking its entry into Australia and growing its portfolio in the public infrastructure sector around the world.

In February, ADQ also said it was leading a consortium that would invest $35 billion in major projects in Egypt, including acquiring the development rights for Ras El Hekma, a coastal region about 350km north-west of Cairo.