Saudi SALIC brings its stake in Singapore’s Olam subsidiary to 80%

Saudi Arabian Agriculture and Livestock Investment Company (SALIC) has entered into an agreement to purchase a 44.58% stake in Olam Agri Holdings, the agricultural products division of Singapore’s Olam Group, writes Just Food.

The deal will be valued at $1.78 billion and is expected to close in the fourth quarter.

After the deal is closed, state-owned SALIC will control more than 80% of Olam Agri, Olam Group said in a statement confirming the sale of the agribusiness (these intentions first became known in November last year).

Shareholder and regulatory approvals are required to finalize the transaction.

The deal implies a valuation of Olam Agri at $4 billion. Thus, the value of the company has increased, since in December 2022, when SALIC acquired a 35.43% stake in Olam Agri for $1.24 billion, the Singapore-based company was valued at $3.5 billion.

Under the terms of the agreement, SALIC will be able to acquire the remaining 19.99% stake in Olam Agri three years after the full closing of this transaction.

The sale of 100% stake in Olam Agri will generate $3.9 billion in revenue for Olam Group and add $2.7 billion to its equity.

The proceeds from the transaction may be used to repay debt or distributed as additional dividends, Olam Group said in a statement.

Suleiman Al Rumaih, CEO of SALIC, said: “The agreement to acquire Olam Agri is fully aligned with SALIC’s strategic objectives to diversify its suppliers of key commodities, strengthen supply chain integration and improve logistics efficiency through local and international investments.”

Olam Group will retain ownership of the remainder of the group, including the ofi food ingredients business (formerly Olam Food Ingredients).

The Singapore-based company said it will now focus on analyzing strategic options to maximize the value of its businesses. One scenario is to take ofi to an IPO.

Olam Group had previously considered an IPO and a demerger of Olam Agri, but postponed those plans. The company has since explored various strategic alternatives and in November 2024, it received a takeover offer from SALIC for Olam Agri.

Tags: Singapore, palm oil, Olam, SALIC