Abu Dhabi-based Modon Holding PSC announced its collaboration with LuLu Retail, a prominent retail chain in the Middle East, to establish and manage hypermarkets and additional retail facilities in the UAE and Egypt.
Leveraging expertise for community retail
Modon Holding will utilize its extensive experience in large-scale project development to deliver community retail options, including hypermarkets, supermarkets, and various retail outlets operated by LuLu within Modon’s portfolio, which is set to accommodate millions of residents in the future. Furthermore, the two entities will jointly identify high-potential locations for retail expansion, implement smart retail innovations, enhance logistics infrastructure, and elevate customer experiences through cutting-edge retail technologies.
Strategic growth agenda
This partnership, formalized through a memorandum of understanding (MoU), signifies a crucial advancement in Modon Holding’s broader expansion strategy, which focuses on tapping into high-potential sectors for project growth.
Collaborative committee formation
A collaborative committee, comprising representatives from both Modon Holding and LuLu Retail, will facilitate smooth cooperation, ensure effective communication, and identify potential joint projects and initiatives. This committee will allow for the exchange of expertise and informed decision-making, addressing operational requirements and maximizing mutual benefits.
Extensive store network
Headquartered in Abu Dhabi, LuLu is a key retail chain in the Middle East, with a diverse international business portfolio that includes retail operations, shopping mall development, manufacturing, trading, hospitality, and real estate. LuLu’s reach extends across 23 countries in the Middle East, Asia, the U.S., and Europe.
LuLu Retail operates a network of 240 stores, which includes 116 hypermarkets, 102 express stores, and 22 mini markets throughout the GCC. The company sources high-quality products from 85 countries, aiming to mitigate supply risks and ensure year-round availability. Additionally, LuLu serves as a mandated food security partner in the UAE, Oman, and Bahrain.
His Excellency Jassem Mohamed Bu Ataba Al Zaabi, chairman of Modon Holding, said: “Our collaboration with LuLu Retail highlights our commitment to delivering vibrant lifestyle communities that address the full spectrum of resident’s needs. A testament to our shared vision of growth, this MoU sets the stage for an exceptional retail experience within our developments, ensuring long-term value for Modon residents in the UAE and Egypt.”
Moreover, Yusuff Ali, chairman & managing director of LuLu Group, said: “We are excited to collaborate with Modon Holding as we continue to expand our footprint. This MoU will further allow us to offer unparalleled shopping experiences that blend quality and innovation while catering to the diverse requirements of the communities in the UAE and Egypt.”
Furthermore, Bill O’Regan, group chief executive officer of Modon Holding, said: “Partnering with LuLu Retail enables us to create retail environments that encourage community connections and pave the way for the future of shopping. By combining our expertise, we will be ideally positioned to bring state-of-the-art retail offerings to our sustainable, people-centric developments across the UAE and Egypt.”
IPO announcement
On Monday, LuLu Retail announced the price range for its share sale and the commencement of the subscription period for its initial public offering (IPO) on the Abu Dhabi Securities Exchange (ADX). Additionally, the subscription period starts today and is expected to close on Tuesday, November 5, 2024, for the UAE retail offering, eligible senior executives, and professional investors. The offer price range is set between AED1.94 and AED2.04 per share, potentially resulting in an offering size between AED5.01 billion ($1.36 billion) and AED5.27 billion ($1.43 billion) if all shares are sold. Based on this price range, LuLu Retail will have a market capitalization of between AED20.04 billion and AED21.07 billion.
Shareholder sale plans
The company’s sole shareholder, LuLu International Holdings Limited, also plans to sell a total of 2,582,226,338 ordinary shares, representing 25 percent of the company’s total issued shares. The final offer price is anticipated to be announced on Wednesday, November 6, 2024.
Dividend strategy
Furthermore, LuLu Retail aims for a total dividend payout ratio of 75 percent of annual distributable profits after tax, distributed semi-annually. Also, the dividend for the six months ending December 31, 2024, is scheduled for payment in the first half of 2025. The shares are expected to commence trading on the ADX on Thursday, November 14, 2024.
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