By Gerelyn Terzo, Global AgInvesting Media
In a landmark ag industry deal, Olam Group, a Singapore-domiciled food and agri-business company, is offloading the remaining stake of its agriculture products business to the Kingdom of Saudi Arabia. There are several moving parts to the deal. Saudi Arabia’s ag and livestock investment firm SALIC, owned by the massive Public Investment Fund (PIF), a sovereign wealth fund, is acquiring the remaining 64.57 percent stake in Olam Agri that it doesn’t already control.
The acquisition will unfold in two separate tranches, the first of which is for a 44.58 percent stake and comes with a price tag of $1.78 billion, bolstering its total ownership to over 80 percent while leaving the balance to be acquired after a three-year stretch.
Olam Agri, a key player in the global agri-business industry, is focused on the beginning of the ag supply chain. The company owns and operates plantations and farms, producing raw ag commodities including a big portion of Asia and Africa’s food supply chains. Olam Agri specializes in grains and oilseeds, animal feed and protein, rice, cotton, wood rubber and more, with a footprint that spans over 30 countries and revenue that exceeded $23 billion in 2023.
Olam Group’s exit from Olam Ag coincides with its reorganization that was announced in early 2020 and will see the company pursue an IPO of its Olam Food Ingredients (ofi) business. Olam Group’s lineup of shareholders includes high-profile names like Temasek Holdings at 51.8 percent, Mitsubishi Corp at 14.6 percent and Kewalram Chanrai Group at 7.0%, as well as directors and other institutional and public investors.
SALIC’s investment considers a valuation of $4 billion attached to Olam and comes on the heels of the company’s first investment in the Singaporean ag giant in 2022, when it purchased a 35.4 percent stake at a then valuation of $3.5 billion, per the announcement. That deal took the better part of a year to be completed and also resulted in a supply and cooperation agreement between Olam and SALIC. Upon the completion of the new deal, Olam Group expects to generate cash proceeds of $1.84 billion.
OGL Co-Founder and Group CEO Sunny Verghese said: “With its strategic mandate as a global agri-foods 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.
Salic CEO Sulaiman AlRumaih stated, “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.”
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