SINGAPORE — As part of Olam Group’s reorganization plan, the global agribusiness’ wholly owned subsidiary Olam Holdings Pte. Ltd has sold a 35.43% minority stake in Olam Agri Holdings Pte. Ltd. for $1.24 billion to the Saudi Agriculture and Livestock Investment Co. (SALIC).
Olam Group, based in Singapore, said it will continue to hold a 64.57% stake in Olam Agri. The transaction, which was announced on March 25, 2022, values Olam Agri at an equity valuation of $3.5 billion.
Olam Agri and SALIC also have entered into a strategic supply and cooperation agreement that will accelerate Olam Agri’s access into the large and high-growth Middle East markets.
“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,” said Sunny Verghese, co-founder and chief executive officer of Olam Group. “It also reflects Olam Agri’s food security expertise, which is emerging as an important secular trend for our industry.”
Olam Group said the deal provides significant value for its shareholders, crystalizes a benchmark valuation for Olam Agri and creates a strong shareholder base, capitalizes on partnership synergies to support Olam Agri’s growth and right-sizes Olam Group’s capital structure.
Olam Agri is a market leading, differentiated food, feed and fiber agribusiness with a global origination footprint, processing capabilities and understanding of markets built over 33 years. The company has products across grains and oilseeds, animal feed and protein, rice, edible oils, specialty grains and seeds, cotton, wood products, rubber, and commodity financial services.
“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 fiber across high-growth end consumption markets, will accelerate Olam Agri’s growth into new markets,” Verghese said.
SALIC was established in 2009 as a Saudi joint-stock company wholly owned by the Public Investment Fund (PIF). SALIC aims to achieve food security for the Kingdom of Saudi Arabia through investments in both domestic and international opportunities.“This strategic partnership with Olam, whose global leadership is in the grains and diversified products, will be a key contributor toward achieving our vision and allowing both companies to contribute toward meeting the increasing global food demand,” said Sulaiman AlRumaih, chief executive officer at SALIC. “SALIC aims to continue contributing towards food security by diversifying international investments and securing sustainable sources for key commodities.”