SINGAPORE – Singapore-based agri-food giant Olam Group has received a takeover proposal from Saudi Agricultural and Livestock Investment Company (SALIC) for its Olam Agribusiness unit.
The company confirmed that the non-binding indicative offer (NBIO) is currently under consideration, though no final terms or legally binding agreements have been made.
Olam has yet to reveal the financial specifics of the proposal.
The company emphasized that discussions are in progress but cautioned that a sale is not guaranteed at this stage.
SALIC’s latest interest follows its previous investment in Olam Agri; in December 2022, SALIC International Investment Company, a subsidiary of SALIC, acquired a 35.43% share in Olam Agri for US$1.24 billion.
Initially, Olam Group had planned to spin off Olam Agri through an initial public offering (IPO) and demerger, subject to shareholder approval and market conditions.
The IPO was intended to allow Olam’s three primary divisions — OFI, Olam Agri, and the remaining core group — to focus on their respective growth areas.
The separation was also expected to provide shareholders with greater control over their investment allocations based on personal risk tolerance and financial goals.
However, after delaying the Olam Agri IPO, Olam announced it would be open to exploring other strategic options, including the potential sale to SALIC.
Operating in the global food and agriculture sector, Olam Group serves over 22,000 clients across more than 60 nations.
For the first half of 2024, Olam reported a 9.1% year-over-year revenue increase, reaching US$20.41 billion, primarily due to higher sales volumes.
Earnings before interest and taxes (EBIT) also rose by 8.3%, totaling $830 million, largely supported by contributions from OFI.
Olam Agri, however, saw an 8.4% decline in EBIT, recording US$479 million for the first half of 2024.
This drop followed what the company described as a strong performance in the same period last year, although its Food & Feed – Processing & Value-Added segment continued to grow.
Olam Group has previously expanded its portfolio through acquisitions, including its April 2021 purchase of Olde Thompson, a U.S.-based spice and seasoning company, for US$950 million.
Earlier, in 2020, Olam acquired the chili and spicy sauces division of Japan-based Mizkan Group for US$108.5 million.
The company also announced a major restructuring effort in 2020, dividing its operations into two core business units and signalling future divestitures and IPOs as part of a long-term growth plan.
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