Olam Group plans sales of remaining stake in its global agri business
The Olam Group, parent business of ingredients enterprise ofi, has confirmed it has proposed the sale of its remaining stake in its agricultural arm, Olam Agri to the Saudi Agriculture & Livestock investment company (Salic), as part of wider strategic reorganisation of its operations, reports Neill Barston.
As the Singapore headquartered firm noted, its farming interests have in fact experienced an uplift in recent times, despite market volatility with ingredients price rises and geopolitical tensions in the Middle East and in Gaza, that continue to impact across sectors.
According to the firm, the agreement will be in the form of a 44.58% stake in Olam Agri to SALIC for approximately US$1.78 billion, at an implied 100% equity valuation for Olam Agri of US$4.00 billion. This follows an initial stake being sold to the Saudi group in December 2022.
A second and final option to buy the remaining 19.9% portion of Olam Agri will then be on the table to completely divest the business from its portfolio, with its ingredients division enjoying positive fortunes across a number of segments including devising solutions for confectionery, snacks and bakery ranges.
Olam’s Co-Founder and Group CEO, Sunny Verghese felt that the deal came from an existing strong relationship with its proposed buyer. He commented: “Since SALIC’s investment in Olam Agri in 2022, our partnership with SALIC has unveiled new avenues of growth. With its strategic mandate as a global agrifoods investor and related complementary strengths, SALIC and Olam Agri share the same vision and focus on sustainable sourcing and commitment to meet the rising demand for food, feed and fibre.
“Importantly, this transaction is transformative for Olam Agri. “The sale of Olam Agri to SALIC marks another key milestone in Olam’s Re-organisation journey announced in January 2020. 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.
