PIF-owned Salic pays $1.8bn to up stake in Olam Agri

Olam Agri/X

Saudi Agricultural and Livestock Investment Company (Salic) will acquire a 45 percent stake in Olam Agri Holdings for $1.8 billion, the Singapore-based company said in a statement.

The transaction values Olam Agri at $4 billion, higher than the $3.5bn put on the company in November last year when Salic, a Public Investment Fund (PIF) subsidiary, bought a 35 percent stake for $1.2 billion.

Salic now has a controlling stake of 80 percent.

After selling the 45 percent stake, Olam Group, which is listed on the Singapore stock exchange, will realise an estimated gain of $1.8 billion.

Salic will have a call option to buy the remaining 20 percent stake in Olam Agri, one of the three operating groups in Olam Group, on or before the third year from the latest stake sale.

According to its website, Olam has interests in grains and oilseeds, animal feed and proteins, edible oils, rice, specialty grains and seeds, cotton, wood products, rubber and commodity financial services.

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The divestment of the 100 percent interest in Olam Agri will raise total proceeds of $3.9 billion for Olam Group, adding $2.7 billion to its equity reserves.

In August 2023, the group announced plans for Olam Agri’s dual listing in Singapore and Saudi Arabia by the first half of 2024. However, regulatory delays have since pushed back the timeline.

“The full acquisition agreement of Olam Agri aligns with our strategic objectives of diversifying sources of essential commodities, strengthening supply chain integration, and enhancing logistical efficiency across its local and international investments,” said Salic group CEO Sulaiman AlRumaih.