Saudi Agricultural and Livestock Investment Company (SALIC), wholly-owned by the Public Investment Fund (PIF), has entered into a definitive agreement with Singapore-based commodity trader Olam Group to acquire a 35.4 percent stake in Olam Agri Holdings for $1.24 billion.
According to the statement, “Olam Agri, one of the three operating groups formed in early 2020 following the re-organization of the Olam Group, gets an implied valuation of $3.5 billion through the potential deal.”
The company said that the proceeds from the transaction would go towards right-sizing Olam Group’s capital structure and reducing its leverage, while capitalizing on partnership synergies to support growth. Olam Group will be the major shareholder of Olam Agri with an estimated 64.6 percent stake.
Sulaiman AlRumaih Group CEO SALIC
“SALIC’s investment in Olam Agri is aligned with its strategy and the Kingdom of Saudi Arabia’s Vision 2030 objective for food security. SALIC’s key strategic objective is to contribute to global and domestic food security through long-term strategic investments in the local and international markets. Olam has demonstrated continuous financial growth as well as increasing global food security contribution with a strong presence in grains and diversified products. Our partnership with Olam will expand SALIC’s international footprint and increase access to strategic commodities. SALIC will leverage its international investments and local portfolio companies to strengthen its position across the agri-food value chain as a global food security player.”
Mr. Sunny Verghese, Co-Founder and Group CEO of Olam Group commented that, “Olam’s partnership with SALIC, a strategic, global investor, will position us for even stronger growth as we realize synergies across our complementary strengths. SALIC’s investment into Olam Agri attests to its consistently strong financial performance and robust growth outlook, following a record year in 2021.”
“Secondary placement for Olam Agri would lead to an immediate unlocking of value for our shareholders, set a benchmark valuation for the future IPO and demerger of Olam Agri, and right-size our balance sheet and reduce gearing at the Group level,” Mr. Verghese added.
