SALIC and Olam Group will support Olam Agri’s entry into Middle Eastern markets.
The Saudi Agricultural and Livestock Investment Company (SALIC), a Saudi joint-stock company owned by Saudi Arabia’s Public Investment Fund (PIF) has acquired a 35.4% stake in Singapore-based commodity trader Olam Group (OGL) through its wholly owned subsidiary, Olam Holdings. The deal is valued at USD 1.24 billion.
Olam Group: A leading commodity trading and processing company
Olam is one of the world’s leading commodity trading and processing companies specializing in grains, oilseeds, rice, and animal feed. The company operates in 30 countries and employs over 9,100 staff and has the capacity to handle more than 40 million tons of products annually.
The deal, which was first announced in March of this year, valued Olam Agri at an equity valuation of USD 3.5 billion, according to a statement by Olam Group. Olam Agri and SALIC have agreed a deal whereby SALIC will support Olam Agri’s entry into Middle Eastern markets.
SALIC: Helping Olam enter regional markets
Group CEO of SALIC, Eng. Sulaiman Al Rumaih, said that SALIC was able to obtain all the necessary approvals from the relevant authorities to complete the deal with Olam Agri Holdings. The CEO pressed on the fact that both SALIC and Olam have entered into a Strategic Supply and Cooperation Agreement which would enable SALIC to help the Kingdom of Saudi Arabia to further progress their food security agenda. Al Rumaih added that the acquisition was a step towards achieving SALIC’s vision of leadership in the food security sector in line with the national strategy for food security and the aspirations of the Kingdom’s Vision 2030, to ensure food sustainability, by elevating the commercial capacities and the integration of strategic investments and collaborations, as well as contributing to achieve the national goals for food security in strategic commodities, by expanding and diversifying foreign investments in countries with competitive advantage.
In a bourse filing, Olam Group stated that the net proceeds from the transaction will be “used to repay debt at the OG Group (Olam Group Limited and its subsidiaries) level, thereby right-sizing its capital structure and reducing leverage.”
OGL will remain as the majority shareholders of Olam Agri with a 64.6% stake and will realize net capital gains of USD 1.19 billion.
Rothschild & Co Singapore and Credit Suisse Singapore served as financial advisers to Olam Group, while Goldman Sachs Saudi Arabia will served as the exclusive financial adviser to SALIC.
In March, PIF announced the first partners in its regional carbon market.