In reference to a recent Bloomberg News report, Olam Group Ltd. has received a non-binding proposal from a state-owned Saudi investment firm for the acquisition of its agribusiness division, as officially confirmed in a statement released on Friday.
Olam stated, "The company is currently evaluating and engaging in discussions regarding a possible sale of its interest in the Olam Agri business." They further noted that "no final terms or formal legal agreements have been established."
As per well-informed sources, Bloomberg has reported that the Saudi Agricultural & Livestock Investment Co., managed by the nation's sovereign wealth fund, is engaged in advanced negotiations for a potential transaction that would value Olam Agri Holdings at approximately $4 billion.
The Saudi firm currently holds a significant stake of slightly more than one-third in Olam Agri, having acquired it for $1.24 billion in 2022. Salic, a subsidiary of the Public Investment Fund, is strategically focused on ensuring food security for the kingdom through both domestic and international investments.
Olam's shares surged by as much as 11% in Singapore before the company’s announcement on Friday, marking the largest intraday increase since February 19.
Last year, Olam had been exploring the possibility of listing its agribusiness unit in Singapore and Riyadh, although plans for the share sale eventually stalled, according to sources who requested anonymity due to the confidential nature of the information.
A spokesperson for Salic chose not to provide any comments.
Olam Agri, a prominent division of Olam, engages in the trading of grains and seeds, and manufactures a diverse range of products such as edible oils and pasta. Established in early 2020 as a result of a strategic reorganization, Olam Agri has identified the Gulf region as a burgeoning market for its offerings. Notably, Saudi Arabia has placed considerable emphasis on ensuring food security, presenting significant opportunities for Olam Agri's products and services.