Olam Group announced that it has completed the sale of a 35.43% minority stake in Olam Agri Holdings to the Saudi Agricultural and Livestock Investment Company (SALIC) for US$1.24 billion. The acquisition agreement for the transaction was signed in March 2022.
Olam Agri, with its headquarters in Singapore, is one of the world’s leading commodity trading and processing companies specializing in grains, oilseeds, rice, and animal feed. Olam exists in more than 30 countries worldwide and has the capacity to handle more than 40 million tons of products annually.
The transaction values Olam Agri at an equity valuation of US$3.5 billion. Olam Group will continue to hold a majority stake of 64.57% in Olam Agri. Additionally, Olam Agri and SALIC have entered into a Strategic Supply & Cooperation Agreement, which will accelerate Olam Agri’s access into the large and high-growth Middle East markets.
In line with Olam Group’s Re-organisation, this transformative deal unlocks significant value for its shareholders, crystallises a benchmark valuation for Olam Agri today and creates a strong shareholder base, capitalises on partnership synergies to support Olam Agri’s growth and right-sizes Olam Group’s capital structure.
Olam Group’s Co-Founder and Group CEO, Sunny Verghese said: “The successful sale of the substantial minority stake in Olam Agri is in lockstep with the Group’s Re-organisation Plan. It is a testament to the strength of Olam Agri that we have completed a deal of this size amidst current macroeconomic uncertainty and geopolitical challenges. It also reflects Olam Agri’s food security expertise which is emerging as an important secular trend for our industry. “This marks a pivotal moment for Olam Agri as our strategic partnership with SALIC, whose interests align with Olam Agri’s focus on meeting the increasing demand for food, feed and fibre across high-growth end consumption markets, will accelerate Olam Agri’s growth into new markets.”
SALIC Group’s CEO, Sulaiman AlRumaih said: “The completion of this deal is a step towards achieving the vision of SALIC to be a food security leader in alignment with the national food security strategy and the aspirations of the Kingdom of Saudi Arabia’s Vision 2030. This strategic partnership with Olam, whose global leadership is in the grains and diversified products, will be a key contributor towards achieving our Vision, and allowing both companies to contribute towards meeting the increasing global food demand. “SALIC aims to continue contributing towards food security by diversifying international investments and securing sustainable sources for key commodities.”