Singapore-based Olam Group on Monday said it will sell a 44.58 per cent stake in its agricultural products business Olam Agri for $1.78 billion to state-owned Saudi Agricultural and Livestock Investment Company (SALIC).
The transaction values Olam Agri at $4 billion, higher than the $3.5 billion valued at the transaction in December 2022 when it sold a 35 per cent stake.
Post-stake acquisition, SALIC will hold an 80 per cent controlling stake in the business, Reuters reported.
The shares of Olam jumped as much as 8.9 per cent in early trading on Monday to S$1.230 following the announcement – their highest level since January 6.
The stake sale will result in a gain of $1.84 billion for Olam Group, the firm said in an exchange filing.
Olam Group will divest its remaining 19.99 per cent stake in the unit three years after the completion of the first phase, giving SALIC full control of Olam Agri, it said.
Including the 35.43 per cent stake sold to SALIC in December 2022, Olam Group will unlock $3.87 billion in gross proceeds from the complete divestment of Olam Agri.
“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,” said Sulaiman AlRumaih, CEO of SALIC Group, in a statement.
Olam Group, which is also planning to list its ingredients business, ofi, on the premium segment of the London Stock Exchange alongside a secondary listing in Singapore, said it can now focus on ways to unlock value for the remaining businesses.
“With this transaction, we can now focus our attention on seeking strategic options to unlock value for the remaining Olam Group businesses and ofi, including the pursuit of an ofi IPO,” Group CEO Sunny Verghese said.
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