$300m UAE IT distributor could be sold

Tech Data Middle East is rumoured to be up for sale by its US-based parent group.

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By  Andrew Seymour and Rob Corder Published  March 20, 2007

Speculation is rife that Tech Data, a $21.4 billion distributor of computer equipment and software, is on the verge of selling its Middle East operation.

Channel Middle East, the region's leading magazine for the computer industry, is reporting that staff at Tech Data Middle East's Dubai headquarters were informed last week that the company is being "pursued" by several potential suitors.

"There was an announcement made in the office that Tech Data will be sold and there are three companies in the frame," claimed one source.

"They are talking about a takeover to happen by April, but have reassured employees and told them it will not have any impact."

Tech Data Middle East is one of the region's largest distributors with sales of over $300 million last year.

Any move to abandon the Middle East market by the US-based parent group would be a remarkable U-turn for the company. Earlier this year, Tech Data reiterated its commitment to the region and unveiled ambitious plans to expand its operations in the Saudi Arabian market.

However, that expansion has been hampered by legal restrictions that prevent it operating a wholly owned subsidiary in the Kingdom.

"There are certain countries where Tech Data can't have 100% ownership and that probably makes it difficult," alleged one distribution source to Channel Middle East.

No firm information has emerged about potential acquirers for Tech Data Middle East.

Ingram Micro, which eclipsed its rival world-wide with revenue of $31.36 billion in 2006, is possibly in the frame. The company admits it is interested in expanding in the region at some stage.

Home grown distribution giant Aptec is also rumoured to be chasing a tie-up with Tech Data. Aptec CEO and chairman Ali Baghdadi declined to comment on the Tech Data speculation when contacted by Channel Middle East this week.

However, Aptec has since called a press conference for later this week where it intends to announce "major Middle East expansion plans".

The firm has not indicated if this involves some form of agreement with Tech Data, but it is promising to unveil a "new business structure."

Tech Data Middle East boss, Hanspeter Eiselt, could not be reached for comment.

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