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A Saudi Arabian state-owned funding firm has agreed to purchase a controlling stake in Singapore-based commodities dealer Olam Agri that values the group at $4bn, as the dominion accelerates efforts to diversify past oil and safe crucial agricultural provide chains.
Below the deal, Saudi Agricultural & Livestock Funding Firm (Salic), a subsidiary of the nation’s sovereign wealth fund, will purchase an extra 44.6 per cent stake in Olam Agri for $1.78bn, giving it an 80.01 per cent share within the arm.
“Now we have change into a totally sustainable and built-in meals safety participant and a meals trade chief, which is the imaginative and prescient of Salic — to be a regional in addition to a worldwide meals safety firm,” Sunny Verghese, chief government of Olam Group, mum or dad of Olam Agri, mentioned at a press convention.
Shares in Olam Group, which is majority owned by the Singaporean wealth fund Temasek Holdings and listed on the city-state’s alternate, closed 5 per cent larger on Monday.
The deal is a part of a wider technique by Saudi Arabia to safe crucial meals provide chains because it seeks to protect itself from world commodity shocks and cut back its reliance on imports.
The Gulf state imports greater than 80 per cent of its meals and has been accelerating its investments in agribusiness, farming and meals logistics as a part of Crown Prince Mohammed bin Salman’s financial transformation plan.
Olam Agri is among the largest world merchants of grains, oilseeds and edible oils, giving Saudi Arabia direct entry to sourcing and logistics networks throughout Asia, Africa and the Center East.
Salic, backed by the dominion’s $925bn Public Funding Fund (PIF), has been steadily buying stakes in meals manufacturing and agribusiness teams worldwide.
For Olam, the sale is a part of a broader restructuring, which started in 2020 when the corporate cut up into two foremost working models — Olam Agri and Olam Meals Substances (Ofi).
Olam Agri centered on buying and selling and processing grains, oilseeds and edible oils, whereas Ofi specialised in higher-margin meals substances, together with cocoa, espresso, dairy, nuts and spices.
Olam Group had beforehand deliberate to record Olam Agri on inventory exchanges in Singapore and Saudi Arabia, however regulatory challenges delayed these efforts.
Salic now intends to record Olam Agri in Saudi Arabia, the place the possession by a neighborhood entity will make regulatory approvals simpler.
The timing of the preliminary public providing stays undecided, with Salic anticipated to evaluate the corporate’s portfolio, potential asset injections, and market circumstances earlier than making a call.
The Olam Agri deal follows Saudi investments in Australian grain manufacturing, Ukrainian farmland and Brazilian meatpacking operations.
Salic already owns stakes in key meals producers worldwide, together with Minerva Meals, considered one of Brazil’s largest beef exporters, and UkrLandFarming, a significant Ukrainian agricultural group.
