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DP World Acquires Leading US-based Logistics Provider

DP World said that the acquisition will be funded from existing available resources (WAM).
DP World said that the acquisition will be funded from existing available resources (WAM).
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DP World Acquires Leading US-based Logistics Provider

DP World said that the acquisition will be funded from existing available resources (WAM).
DP World said that the acquisition will be funded from existing available resources (WAM).

DP World has announced the acquisition of 100 percent of syncreon for an enterprise value of $1.2 billion.

The transaction is subject to customary completion conditions and is expected to close in second half of 2021.

Syncreon is a US based global logistics provider that specializes in the design and operation of complex supply chains for the high growth automotive and technology industries. It provides specialized value-added warehousing and distribution solutions through a variety of manufacturing, export packaging, transportation management, reverse/repair and fulfilment services.

Syncreon has a global presence across 91 sites in 19 countries and services a large and diversified portfolio of customers made up of multinational companies, state news agency WAM reported.

In FY2020, the group reported revenue of $1.1 billion with 57 percent generated in EMEA (predominantly Europe) and 42 percent in North America. It has longstanding partnerships with customers averaging 18 years, and high contracts renewal rates.

Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World, said: "We are delighted to announce the acquisition of syncreon, which adds significant strategic value to DP World given its strong logistics solutions capability, and will allow DP World to deliver end-to-end solutions to cargo owners."

The acquisition will be funded from existing available resources.

DP World continues to make positive progress on its capital recycling programs and remains fully committed to its leverage target of below 4.0x Net Debt/EBITDA by the end of 2022.

For his part, Brian Enright, CEO of syncreon, said: "We are excited to join the DP World group as we believe that syncreon will benefit from the group’s significant expertise in the wider supply chain and excellent relationships with cargo owners. We share the vision of serving our customers through removing inefficiencies and delivering value add solutions. While we have enjoyed great success over the years, we believe being part of DP World will enable us to take the business to other markets."

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Saudi Arabia's Digital Advertising Boom: Addressing Economic Leakage, Boosting Local Content

A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
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Saudi Arabia's Digital Advertising Boom: Addressing Economic Leakage, Boosting Local Content

A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
A digital advertising event recently held in Riyadh (Asharq Al-Awsat)

Saudi Arabia’s digital advertising sector is experiencing rapid growth, but a significant portion of its revenues is leaking to foreign platforms. To maximize the impact on the national economy, experts are calling for strategies to curb this outflow and redirect it to local channels.

The importance of retaining digital ad revenues lies in the substantial size of this market. It is estimated that approximately $1 billion in ad spent is lost annually to foreign platforms, representing a considerable loss to Saudi Arabia’s economy.

Dr. Ebada Al-Abbad, CEO of Marketing and Communications at Tadafuq, a Saudi digital advertising network, told Asharq Al-Awsat that the problem stems from the fact that although advertisers, products, and audiences are often local, the largest share of financial gains goes to foreign platforms. He estimated that 70-80% of the $1.5 billion spent on digital advertising in Saudi Arabia in 2022 went to global platforms such as Google and Facebook. This results in the national economy losing nearly $1 billion annually from this sector alone.

Al-Abbad noted that government agencies in Saudi Arabia also contribute to the outflow. He explained that public sector spending on digital advertising, intended to raise awareness among citizens and residents, frequently ends up on foreign platforms. Government spending makes up about 20-25% of the total digital ad market in the Kingdom, meaning hundreds of millions of riyals leave the country annually, weakening the local digital economy.

Al-Abbad argues that Saudi Arabia needs strong local digital ad networks to keep this revenue within the national economy. These networks would help create jobs, drive innovation, and promote cultural diversity in digital content. Developing local platforms would also enhance Saudi Arabia’s digital sovereignty by ensuring that data remains within the country and is not controlled by foreign entities.

Moreover, local networks would reduce dependence on international platforms, ensuring that the economic benefits of digital advertising remain in the Kingdom, he said, stressing that this would align with Saudi Arabia’s broader Vision 2030 goals, which emphasize building a robust, diversified economy driven by local industries and digital transformation.

Globally, the digital advertising sector is growing rapidly. In 2022, worldwide spending on digital ads reached $602 billion, and it is projected to hit $876 billion by 2026. In the Middle East and North Africa (MENA) region, the digital ad market grew to $5.9 billion in 2022, with Saudi Arabia’s market accounting for over $1.5 billion.

In other countries, the digital ad sector plays a crucial role in boosting national economies. For example, in the United States, the digital advertising industry contributed $460 billion to the GDP in 2021, about 2.1% of the total. In the UK, the sector accounted for 1.8% of GDP in 2022. This shows how important digital advertising can be in driving economic growth.

One of the key challenges facing Saudi Arabia’s digital ad sector is the dominance of global platforms like Google and Facebook, which control 60% of the global digital ad market, Al-Abbad told Asharq Al-Awsat. This dominance results in a significant outflow of revenue and allows these platforms to control digital data and content. He warned that this could undermine Saudi Arabia’s national sovereignty over its digital economy.

To counter this, he emphasized that Saudi Arabia needs to build competitive local networks that can retain a larger share of the market. This will not only keep more revenue in the country but also strengthen the Kingdom’s control over its digital data and content.