In a bourse filing on April 27, Olam Group says that it has completed the sale of a 44.58% stake in Olam Agri to the Saudi Agriculture & Livestock Investment Company (SALIC) which will now own 80.01% of Olam Agri.
SALIC is paying around US$1.88 ($2.4) billion for the stake, valuing Olam Agri at US$4 billion.
Olam Group retains a put option to sell its remaining 19.99% stake in Olam Agri to SALIC on the third anniversary of the completion of the current transaction at the base consideration of approximately US$799.6 million and additional option consideration plus a 6% IRR, providing certainty complete divestment of Olam Agri. SALIC also retains a call option to acquire the remaining 19.99% stake on or before the third anniversary at the same consideration.
Olam Group deputy chairman Yap Chee Keong says that the deal is a “major step forward” in delivering the company’s reorganisation plan. “It realises significant value and will enable right-sizing of the capital structure of the Group,” says Yap. “We will continue to focus on the responsible divestment and monetisation of the businesses in OGH [Olam Group Holdco, previously known as Rest of Olam Group], and execute growth initiatives to enable ofi [Olam Food Ingredients] to realise its full potential value.”
Sunny Verghese, co-founder and CEO of Olam Agri, says, “The completion of SALIC’s acquisition of Olam Agri is a transformative step forward to accelerate Olam Agri’s growth and strengthen our position as a leading global agri-business and integrated food security leader.
“With SALIC as a strategically aligned, committed long-term partner and food security leader, we can build on our historical track record of strong performance to further accelerate and scale our ambitions for profitable growth and value creation.”
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Shares in Olam closed one cent or 1% higher on April 27 at $1.04.
