Saudi Arabia’s agricultural and livestock investment firm, SALIC, has finalised a deal to acquire a 44.58% stake in Olam Group’s agribusiness division, Olam Agri, for $1.78 billion. The agreement, announced on Monday, strengthens Saudi Arabia’s focus on food security and its efforts to establish reliable supply chains.
Following the announcement, shares in Singapore-based Olam Group surged by as much as 8.9% in early trading, reaching S$1.23—their largest daily rise since November 2023.
The acquisition values Olam Agri at $4 billion, surpassing the $3.5 billion valuation set in December 2022 when SALIC initially purchased a 35% stake in the business. With this latest transaction, SALIC’s total ownership of Olam Agri will rise to 80%, giving it controlling interest in the company.
SALIC is wholly owned by Saudi Arabia’s $925 billion sovereign wealth fund, the Public Investment Fund (PIF). The deal aligns with Saudi Arabia’s broader strategy to secure stable food supplies, reducing its dependence on imports. Gulf Cooperation Council (GCC) countries currently rely on imports for up to 85% of their food, including staple grains and cereals, according to PwC. A similar move was seen in 2021 when Abu Dhabi’s holding firm ADQ acquired a 45% stake in Louis Dreyfus Company.
Olam Group, which received advisory support from Rothschild for this deal, has confirmed plans to fully divest from Olam Agri. The company will sell its remaining 19.99% stake in the business within three years of completing this phase, ultimately transferring full ownership to SALIC.
Olam Group expects to gain $1.84 billion from the transaction, as stated in an exchange filing. The company’s total earnings from the complete divestment of Olam Agri, including the initial 35% stake sold in December 2022, will amount to $3.87 billion in gross proceeds.
“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 SALIC Group CEO Sulaiman AlRumaih.
Meanwhile, Olam Group is also advancing plans to list its ingredients division, ofi, on the premium segment of the London Stock Exchange, with a secondary listing in Singapore. This strategic move will allow the company to focus on new opportunities for its 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 IPO,” said Olam Group CEO Sunny Verghese.
