Saudi Agricultural and Livestock Investment Co. has agreed to acquire more than a third of Olam Group Ltd.’s food, feed and fibre unit for US$1.24 billion, a deal that will allow the Singapore-listed entity to pare debt.
The state-owned Saudi company will acquire a 35.4% stake in Olam Agri Holdings Pte., which focuses on oilseeds, animal feed & protein edible oils, as well as commodity financial services, Olam said Friday.
The transaction is expected to be completed by the end of this year and puts the agribusiness’s equity valuation at US$3.5 billion.
“This 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,” Olam Chief Executive Sunny Verghese said.
After the deal, Olam’s net gearing is expected to fall to 1.28 times from the current 1.72 times.
Olam will hold a 64.6% stake in Olam Agri and realize net capital gains of 1.19 billion Singapore dollars (US$876.7 million).
Rothschild & Co. and Credit Suisse are acting as financial advisers to Olam, while Goldman Sachs is the financial adviser to Saudi Agricultural and Livestock.
Write to P.R. Venkat at venkat.pr@wsj.com
Ukraine war ends globalization Larry Fink says, Amazon faces union vote, Wall Street bonuses jump to record high, and other news to start your day.
Dow Jones Newswires is a market-moving financial and business news source, used by wealth managers, institutional investors and fintech platforms around the world to identify trading and investing opportunities, strengthen advisor-client relationships and build investor experiences. Learn More.
Saudi Agriculture and Livestock Investment to Acquire 35.4% Stake in Olam Agri Holdings – MarketWatch
