SINGAPORE – Singapore-based multinational Olam Group is contemplating selling its agricultural products division, Olam Agri, to the Saudi Agricultural and Livestock Investment Company (SALIC).
This move comes as Olam Group faces turbulent market conditions, potentially impacting its previously announced plans to list its food ingredients unit.
According to the Wall Street Journal, Olam Group is in preliminary discussions to divest its 64.57 per cent stake in Olam Agri to SALIC. Should this transaction proceed, it could lead to the abandonment of plans to list Olam Agri on the Saudi Exchange.
In 2022, SALIC acquired a 35.43% stake in Olam Agri for US$1.24 billion, valuing the business at US$3.5 billion.
SALIC, wholly owned by Saudi Arabia’s Public Investment Fund (PIF), strongly focuses on agriculture, meat, and poultry investments.
Olam Agri plays an important role in the global feed industry, supplying a wide range of products, including grains, oilseeds, animal feed, and protein.
The company operates across 30 countries and generated over US$23 billion in revenue in 2023.
In August 2023, Olam Group announced that it was targeting the Singapore-Saudi IPO of its agricultural unit by the first half of 2024.
According to Euromoney, a Saudi listing would make Olam the first truly global company to list in Saudi Arabia and the first non-GCC (Gulf Cooperation Council) company to do so.
Per the company’s statement in May 2023, the IPO in Singapore and Saudi Arabia was intended for the first half of this year, but the company announced that it was pushing the IPO further.
Additionally, the company said it plans to list its Olam Food Ingredients unit as part of a business overhaul. Olam Food Ingredients supplies essential components such as cocoa, coffee, nuts, spices, and dairy products to the food and beverage industry. The company reiterated that the listing would occur after Olam Agri’s IPO.
However, the potential sale of Olam Agri to SALIC could affect Olam Group’s broader strategic plans to dual-list its Olam Food Ingredients business on the London and Singapore stock exchanges.
Experts suggest that this IPO, initially valued at over £1 (approximately US$12.7) billion, might be postponed due to market volatility.
Olam Group, SALIC, and the Saudi Public Investment Fund have not yet responded to requests for comment regarding this deal’s ongoing discussions and potential implications.
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