Olam Group Ltd. has confirmed receiving a non-binding offer from Saudi Agricultural & Livestock Investment Co. (SALIC) for a majority stake in its agribusiness unit, Olam Agri. SALIC, a state-owned firm backed by Saudi Arabia’s Public Investment Fund, is reportedly in advanced talks to finalize a deal valuing Olam Agri at approximately $4 billion, according to sources cited by Bloomberg News.
Olam, in a statement on Friday, acknowledged ongoing discussions regarding the potential sale, emphasizing that no definitive terms or formal agreements have been reached. The development comes as part of SALIC’s broader strategy to enhance food security for Saudi Arabia by investing in domestic and international agribusiness ventures.
SALIC already holds just over a third of Olam Agri, a stake it acquired in 2022 for $1.24 billion. The agribusiness unit, a major component of Olam Group, supplies grains, seeds, edible oils, and pasta to markets globally, with a strong presence in the Gulf region.
The news of the potential transaction sent Olam shares soaring by up to 11% on the Singapore Exchange, marking their biggest intraday gain since February 19, 2024.
Olam had previously considered listing the agribusiness unit in Singapore and Riyadh, but preparations for the share sale stalled last year. The Gulf region’s increasing demand for food commodities aligns with Saudi Arabia’s emphasis on securing agricultural supply chains through strategic investments.
Representatives for SALIC declined to comment on the ongoing negotiations. Meanwhile, Olam continues to explore its options for the agribusiness unit as part of its efforts to streamline and maximize value from its operations.
Credit: Bloomberg
