SALIC, a subsidiary of the Saudi Public Investment Fund (PIF), announced on Monday that it signed an agreement to increase its stake in Singapore’s Olam Agri Holdings (Olam Agri) from 35.43% to 80.01%, for a total value of $1.78 billion.
The transaction is subject to regulatory approval, the company said in a statement.
The agreement includes an option for SALIC to acquire the remaining 19.99% stake within three years from the completion date of the latest stake buyout, giving it the opportunity for full acquisition.
The full acquisition agreement of Olam Agri aligns with SALIC’s strategic objectives of diversifying sources of essential commodities, strengthening supply chain integration, and enhancing logistical efficiency across its local and international investments, reported the Saudi Press Agency (SPA).
Furthermore, this acquisition underscores SALIC's ambition to secure a key position in the global grains sector.
According to Bloomberg, the deal values Olam Agri at $4 billion, 23% higher than the current market capitalization of the group, the Singaporean company said.
On completion of the 44.6% stake sale, likely in the fourth quarter of this year, Olam Group will realize an estimated gain on disposal of $1.84 billion, it said.
In early 2022, Olam Group agreed to sell around a third to SALIC, in a transaction that priced it at around $3.5 billion.
“The full acquisition agreement of Olam Agri aligns with SALIC's strategic objectives of diversifying sources of essential commodities ... to secure a key position in the global grains sector,” SALIC Group CEO Sulaiman Al-Rumaih said in a statement.
He added: “Olam Agri, a global player in trading essential commodities, aligns with SALIC's strategic investment approach, which prioritizes high-potential companies addressing future food security needs through innovation and integrated supply chains both locally and globally.”
“We are confident that this partnership will contribute to achieving national and global objectives while continually enhancing production efficiency for the benefit of all stakeholders,” Al-Rumaih said.
OGL’s Co-Founder and Group CEO Sunny Verghese said: “Since SALIC’s investment in Olam Agri in 2022, our partnership with SALIC has unveiled new avenues of growth.”
He said with its strategic mandate as a global agrifoods investor and related complementary strengths, SALIC and Olam Agri share the same vision and focus on sustainable sourcing and commitment to meet the rising demand for food, feed and fiber.
“Importantly, this transaction is transformative for Olam Agri,” Verghese added.
SALIC has a track record of investing across the global agri-food supply chain to improve access to essential foods, with current investments spanning five continents, seven countries, and 16 food commodities.
