After months of negotiations, a state-backed retail chain has abruptly called off talks to buy the local operations of Middle East grocer Spinneys.
A spokesperson for the company told Doha News that it was an “internal decision” taken by Al Meera and declined to provide additional details.
Al Meera first announced it had signed a non-binding letter of intent to acquire Spinneys Qatar for US$30 million in December and had planned to conduct additional due diligence before the transaction closed.
The company released additional details about the potential deal in March.
The scuttled acquisition comes amid a boom in Qatar’s grocery business that has been attracting new companies and prompting chains already operating here to expand.
Last year, Alpen Capital said supermarkets represented one of the fastest-growing segments within Qatar’s retail sector, driven in large part by a rapidly growing population that is generally young and wealthy.
Al Meera has previously expanded its local presence through acquisitions, most notably in a 2011 takeover worth $96 million of four Giant stores as well as Al Oumara Baking Co.
Al Meera also has local franchising agreements with international retailers that led to the company bringing the first Géant Hypermarket and WHSmith stores to Qatar in 2013.
Growing grocery chain
The Qatar government owns 26 percent of Al Meera, which is one of the country’s fastest-growing retail chains.
It opened 10 new locations across the country last year and plans to open a further five stores in 2016, the company said in its most recent annual report.
The company operated 41 stores in Qatar as of March and said it expected to grow to 55 branches within the next two years.
“Al Meera has managed to strengthen its position as one of the main pillars of the national economy,” deputy CEO Mohammed Nasser Al Qahtani stated earlier this year.
While its retail sales jumped 12.5 percent to QR2.45 billion, Al Meera’s bottom line declined for the first time in at least six years in 2015 as it fell 28 percent to QR162.34 million.
However, the company is off to a strong start in 2016, posting double-digit increases in both revenues and profits in the first quarter.
Al Meera has branded itself as a neighborhood retailer, and many of its stores are located in communities outside central Doha.
For its part, Spinneys has three local locations: Two on the Pearl-Qatar, and a third in The Mall on D-Ring Road.
Al Meera and Spinneys primarily compete against large-format foreign retailers such as Abu Dhabi-based LuLu Hypermarket and French grocer Carrefour.
Other rivals include Monoprix, which is also based in France and intends to open a second store in Doha Festival City.