Olam Group Ltd. saw its share price surge nearly 9% to S$1.23 in early trading on Monday following the announcement that the company had sold a stake in its agribusiness unit to Saudi Agricultural & Livestock Investment Co. (SALIC), a state-owned entity controlled by Saudi Arabia’s sovereign wealth fund.
In a filing to the Singapore Exchange, Olam confirmed that SALIC will acquire a 44.6% stake in Olam Agri Holdings for $1.78 billion. This deal will bring SALIC’s total ownership in Olam Agri to 80.01%, with a three-year option to purchase the remaining 19.99%. The transaction values Olam Agri at an estimated $4 billion, a premium of 23% over Olam Group’s current market capitalization.
SALIC, which first purchased just over a third of Olam Agri for $1.24 billion in 2022, is part of Saudi Arabia’s Public Investment Fund. The firm focuses on achieving food security for the kingdom by investing in both domestic and international agricultural ventures.
Olam Agri, a key unit within Olam Group, deals in a wide range of agricultural commodities, including grains, seeds, edible oils, and pasta. Established during a reorganization in 2020, Olam Agri is well-positioned to benefit from growing demand for food security initiatives in the Persian Gulf region, with Saudi Arabia emphasizing self-sufficiency in food supply.
This move is seen as part of Saudi Arabia’s broader strategy to bolster food security while tapping into global agricultural markets.
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