October 24, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

The Saudi Agricultural and Livestock Investment Company (SALIC) and Minerva Foods have acquired the Australian Lamb Company (ALC) for AUD400 million (US$2523.3 million).

SALIC originally agreed to acquire a 20 percent stake in Minerva in December 2015 for $188.4 million. This stake was later raised to 33.83 percent in September 2020, making SALIC the single largest stakeholder in the company that operates more than 27 worldwide slaughterhouses and exports red meat to more than 100 countries. 

The acquisition of ALC was conducted through Minerva Foods Australia, a joint venture established by the two companies last year. At the time, agreements designed to deepen their partnership were signed with the goal of strengthening Saudi Arabia’s food security and Minerva’s market exposure and operations in the Middle East and Asia – two markets that accounted for more than 60 percent of the world’s beef imports in 2020, and which were the destination for 55 percent of Minerva’s beef exports for the first three quarters that same year. 

“The company believes that Australia uniquely complements our operations in South America, maximizing sales opportunities and operating synergies, reducing risks and contributing to our strategy of consolidation in the animal protein export market,” stated Minerva in 2021. 

“With the potential creation of the joint venture set forth in Australia MOU, in partnership with SALIC, the company is seeking to maximize new business opportunities, in order to meet the growing global demand for animal protein, always respecting our commitment to financial discipline.”

The first was a supply contract through which SALIC gained the right to acquire up to 25,000 tons of beef at market prices from Minerva, which operates a string of  slaughterhouses and processing plants in South America.

The second was a non-binding memorandum of understanding (MOU) outlining the potential acquisition by SALIC of assets owned by Minerva in Australia, and the formation of a joint venture for the breeding, farming, processing, and exporting of sheep and cattle.

This move served to reinforce SALIC’s presence in Australia – the world’s leading exporter of processed sheep meat and the second largest exporter of beef – where SALIC already acquired the 200,000-hectare Baladjie Pty Ltd from Australia’s John Nicoletti in April 2019; had established its fully owned subsidiary Australian Merredin Farms; and where it had a dual focus on grains and meat. 

Minerva also saw the move as highly synergistic with existing operations, as last year, Minerva Foods Australia made its first two investments in Australian processing plants when it acquired Shark Lake and Great Eastern – two abattoirs in Western Australia. 

Which brings us to now. ALC is one of the largest meat producers in Australia with two processing facilities in Victoria that have processing capacity of up to 3.78 million head per year – equivalent to 100,000 tons of lamb and sheep meat – serving both the domestic market and exporting to more than 70 overseas countries. 

Sulaiman Al-Rumaih, CEO of SALIC Group, explained how the acquisition of ALC aligns with SALIC’s strategy to meet national food security goals through a portfolio of diversified global investments in countries such as Ukraine, or Australia, which has a competitive advantage in global meat trade, accounting for 42 percent of total red meat exports, of which sheep meat accounts for 49 percent of red meat consumption in the Kingdom.

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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