Olam gets buyout offer for agri unit after IPO delay; shares jump 14%
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Citing sources, Bloomberg said the deal was estimated to place Olam Agri at a valuation of about US$4 billion.
PHOTO: BLOOMBERG
Michelle Zhu
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SINGAPORE - Olam Group has received a non-binding indicative offer for its remaining 64.57 per cent stake in Olam Agri from Saudi Agricultural and Livestock Investment Company (Salic), a unit of Saudi Arabia’s Public Investment Fund.
Salic currently holds a 35.4 per cent minority stake in Olam Agri after investing US$1.24 billion (S$1.6 billion) in the unit.
The deal was completed in December 2022, and was said to value Olam Agri at US$3.5 billion at the time.
On Nov 1, Olam said it is presently exploring the sale of its stake to Salic with appointed advisers.
However, it emphasised that no definitive terms or formal legal documentation have been agreed upon between the parties to date.
“There is no certainty that a sale of the company’s stake in the Olam Agri business will proceed or will materialise,” it added.
Olam’s statement was made in response to an Oct 31 report by Bloomberg, revealing that Salic was in advanced talks with the group on the potential sale.
Shares of Olam closed 15 cents, or 14 per cent, higher at $1.22 on Nov 1.
Citing sources familiar with the matter, Bloomberg said the deal was estimated to place Olam Agri at a valuation of about US$4 billion.
Bloomberg’s sources noted that Olam’s share sale preparations since 2023, for its potential listing of the agribusiness unit in Singapore and Riyadh, had stalled.
Since it ceased trading as Olam International and relisted as Olam Group in March 2022, the company has been working on plans to spin off its two business units: Olam Food Ingredients and Olam Agri.
In May 2023, Olam said its proposed initial public offering (IPO) of Olam Agri – originally slated to be completed by the first half of that year – would be delayed as the necessary regulatory approvals had yet to be obtained.
“While the company focuses on completing discussions for the aforementioned potential sale, the company will also continue to monitor the various conditions guiding its decision in relation to the IPO and concurrent demerger for Olam Agri,” said Olam in its Nov 1 response.
Olam Agri sells grains and seeds and makes everything from edible oils to pasta. The Gulf region is a growing market for the commodities it supplies, and Saudi Arabia is putting a strong emphasis on food security, Bloomberg reported. THE BUSINESS TIMES
