Saudi Arabia to acquire controlling stake of Olam Agri

Photo source: Olam

In a buyout that could see Singapore divest a significant part of its investment exposure to Africa the Saudi Agriculture and Livestock Investment Company (SALIC) is set to become the majority shareholder of Olam Agri – one the world’s biggest agribusiness enterprises with extensive operations in Africa.

SALIC, which already holds a 35.43% interest in Olam Agri, has acquired an additional 44.6% stake of its agribusiness for US$1.78bn, bringing its total shareholding of Olam Agri to 80.01%. The transaction, which is, subject to shareholder and regulatory approval, will see the state-owned Saudi firm take control of the Singapore firm. As part of the agreement, Olam Group will also divest its remaining 19.99% stake at or before the end of three years. The near total divestment of Olam Agri will generate total proceeds of US$3.9bn for Olam Group, contributing an additional US$2.7bn to its equity reserves. Olam Group will retain full ownership of the remainder of the group, including its ingredients business ofi. Olam Group CEO Sunny Verghese said the company will now shift its focus towards exploring strategic options to maximise value for its remaining businesses. That could include a possible IPO of ofi. The head office and key functions of the firm, for now, are expected to remain in Singapore. However, he noted that SALIC intends to list the business publicly, and depending on the chosen market, this could influence the location of the company’s headquarters.

Olam Agri, which has over 39000 employees, was formed in 2020 as part of Olam Group’s restructuring, which split the business into separate units - Olam Agri, Olam Food Ingredients (OFI), and others. It operates across multiple African countries, including Nigeria, Ghana, Cameroon, Côte d’Ivoire, Mozambique, Senegal, South Africa, and the Republic of Congo and specialises in food, feed, and fibre products, with a strong presence in wheat milling and flour production in Ghana, Nigeria, Senegal, and Cameroon. Additionally, Olam Agri is a major producer of animal feed in Nigeria and Senegal. It is also a significant player in edible oils, rice, sesame, cotton, rubber, and timber on the continent.

Olam Group had initially planned to list Olam Agri in both Singapore and Saudi Arabia, but regulatory delays stalled those efforts. In early 2022, Olam Group sold a third of its business to SALIC - the food and agriculture investment arm of the Saudi Sovereign Wealth Fund PIF. It is expected that the acquisition of Olam Agri could contribute to strengthening Saudi Arabia’s domestic agri-food ecosystem.

Olam Group is expected to maintain a presence in Africa through OFI and its other remaining businesses units. OFI, a food ingredients supplier, sources and processes crops such as cocoa, coffee, and cashew nuts in several countries in the continent. Under its Remaining Businesses unit, Olam also owns a packaged foods portfolio in West Africa, comprising confectionery, biscuits, noodles, and tomato-based products. In addition, the group operates a crude palm oil joint venture with the Republic of Gabon.

 

References

'Olam – from small Nigerian trading outfit to global commodities giant', How we made it in Africa, 16 April 2012

‘Olam Agri acquires the second biggest poultry feed producer in Senegal’, NTU-SBF Centre for African Studies, 22 March 2024

‘Olam to establish pasta factory in Ghana’, NTU-SBF Centre for African Studies, 23 September 2024

'Olam sells agri-business stake to Saudi in long-awaited deal', Bloomberg, 24 February 2025

'Proposed sale of Olam Group’s remaining 64.57% stake in Olam Agri to SALIC', Olam Group, 24 February 2025

'Olam to sell 44.6% stake in agribusiness to Saudi Arabia for $1.8 billion, shares jump', Reuters, 24 February 2025

'S’pore-listed Olam to make $2.46 billion gain from sale of stake in agribusiness unit; shares surge', The Straits Times, 24 February 2025

'About us', Olam Group, Accessed 24 February 2025