Olam Agri closes $1.8bn sale to Saudi as shares jump

Singapore-listed Olam Group on Monday sold a 44.58 percent stake in its agricultural products business, Olam Agri, for $1.78 billion (S$2.35 billion) to Saudi Agricultural and Livestock Investment Company (Salic), a unit of the country’s sovereign wealth fund.

The transaction, which values Olam Agri at $4 billion, will give Salic an 80 percent controlling stake in the business.

The stake sale will result in a gain of $1.84 billion for Olam Group, the company said in an exchange filing.

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Olam will divest its remaining 19.99 percent stake in the unit three years after the completion of the first phase, giving Salic full control of Olam Agri, it said.

Including the 35.43 percent stake sold to Salic in December 2022, Olam Group will unlock $3.87 billion in gross proceeds from the complete divestment of Olam Agri.

Olam Group also intends to list its ingredients business, Ofi, on the premium segment of the London Stock Exchange alongside a secondary listing in Singapore.

“With this transaction, we can now focus our attention on seeking strategic options to unlock value for the remaining Olam Group businesses and Ofi, including the pursuit of an ofi IPO,” Sunny Verghese, group chief executive, said.

Olam Agri, which sells grains and seeds and makes everything from edible oils to pasta, is one of Olam’s main units.

It was created during a reorganisation in early 2020. The Persian Gulf region is a growing market for the commodities that Olam supplies and Saudi Arabia has placed a strong emphasis on food security.

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Meanwhile, shares in Olam Group jumped by 8.9 percent in early trading to S$1.23 on Monday, their biggest daily jump since November last year.