Singapore-based food trader Olam Group Ltd. has reached an agreement to sell a significant portion of its agri-business unit to Saudi Arabia’s state-owned investment firm, valuing the division at $4 billion. The sale involves a 44.6% stake in Olam Agri, a major part of Olam Group that deals in grains, seeds, edible oils, pasta, and more. The transaction has led to a nearly 9% surge in Olam’s stock, although the gains were partially trimmed by the end of the day.
The stake in Olam Agri will be purchased by Saudi Agricultural & Livestock Investment Co. (Salic), a company controlled by the kingdom’s sovereign wealth fund, for $1.78 billion. This move gives Salic an 80.01% ownership of Olam Agri, with an option to acquire the remaining shares within the next three years.
Olam Agri was established in 2020 as part of a corporate restructuring. The company had previously explored listing the division in Singapore and Saudi Arabia, but regulatory hurdles delayed these plans. In 2022, Olam sold about a third of Olam Agri to Salic, pricing the division at around $3.5 billion at the time.
The latest transaction, which values Olam Agri at $4 billion, represents a 23% premium over Olam Group’s current market capitalization. Olam Group expects to record an estimated gain of $1.84 billion following the sale of the 44.6% stake.
This deal underscores Saudi Arabia’s broader ambitions to diversify beyond oil, focusing on securing its food and commodity supply chains. The kingdom has been seeking to boost self-sufficiency and reduce its dependence on petroleum.
The sale of the agri-business stake allows Olam Group to turn its attention to other strategic initiatives, particularly the food ingredients division, which handles cocoa and coffee trading. This division, called Olam Food Ingredients (ofi), is also planning an initial public offering on the London Stock Exchange.
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