Olam mulls sale of remaining shares in agri-business unit to Saudi investment firm

SAUDI ARABIA – Olam Food Ingredients (OFI), a global leading food and agri-business, supplying food ingredients worldwide, is exploring options including the sale of its agricultural products business.

The move could result to a push back plans to list its food ingredients unit. As part of a reorganization, Olam Group announced plans in 2021 to dual list the Olam Food Ingredients business on the London and Singapore stock exchanges.

However, experts said the initial public offering (IPO) will likely be pushed to next year as market conditions remain volatile. “The IPO of Olam Food Ingredients was estimated at over US$1.0 billion,” experts said.

New market report explain that the company is considering selling remaining 64.57% stake in Olam Agri, currently held by Singapore’s sovereign wealth fund Temasek, to the Saudi Agricultural and Livestock Investment Company (SALIC).

SALIC had initially acquired a 35.43 percent stake in Olam Agri in 2022 for US$1.24 billion putting the business’s equity value at US$3.5 billion.

The development comes on the heels of a landmark commodity Murabaha financing from a diversified group of global investors (including UAE, Malaysia, Singapore and Hong Kong) totaling US$625 million.

The Facility has Olam Agri subsidiaries Olam Global Agri Pte. Ltd. and Olam Global Agri Treasury Pte. Ltd. as purchasers with a tenor of three years.

The Facility is initially guaranteed by Olam Group which will transfer to Olam Agri post the planned IPO and demerger of Olam Agri. Proceeds from the Facility will be applied towards general corporate purposes.

Similarly, the commodity trader completed the acquisition of Avisen SARL (“Avisen”) for EUR 18.56 million, assuming 100 per cent ownership of the company.

Established in 2000 by two veterinarians, Avisen has grown to become one of Senegal’s major suppliers of feed, with its facility located in Rufisque producing over 100,000 metric tons (MT) of feed.

Olam Agri has had a strong presence in Senegal for almost a decade and is an established player in the wheat milling industry with its operations in Dakar supplying customers with a range of traditional and specialty flours.

However, the acquisition further extends the company’s feed and protein presence in West Africa, where it is one of the leading animal feed and day-old chick producers in Nigeria, while generating synergies with its wheat milling business in Senegal.