SOFT commodities company Olam International has agreed to reduce its stake in New Zealand's Open Country Dairy (OCD).

Olam will sell up to 14.99 per cent of OCD to Talley's Group, OCD's largest shareholder. The deal is worth up to NZ$46.5 million (S$44.6 million).

Olam is the second largest shareholder of OCD with 24.99 per cent.

There are two ways the shares will be transferred to Talley's. One will be via a direct share sale. Olam will also accept a partial takeover offer from Talley's for OCD.

"The transaction will release cash for Olam while still maintaining product arrangements with OCD, which are strategically important for Olam's dairy supply chain business," said an Olam statement on Monday.