SALIC, which is owned by the state, currently possesses a 35.4% interest in Olam Agri, a stake it obtained in 2022 as part of a Strategic Supply & Cooperation Agreement established between the two organizations.
This announcement follows a report from Bloomberg indicating that negotiations for a potential deal were underway.
In a statement issued to the Singapore Exchange (SGX), Olam Group confirmed that it has received a non-binding indicative offer from SALIC. The statement further noted that Olam is actively considering the offer with the assistance of its appointed advisers, assessing the potential sale of the remaining shares in its agribusiness segment.
“While the company is reviewing and in discussions regarding a potential sale of its stake in the Olam Agri business, the company would like to stress that no definitive terms or formal legal documentation have been agreed upon between the parties to date,” the statement said. “There is no certainty that a sale of the company’s stake in the Olam Agri business will proceed or will materialize.”
Olam Agri, a major division of Olam Group alongside Olam Food Ingredients, oversees a varied portfolio that includes the management of the Queensland Cotton business, which operates six gins and several warehousing facilities throughout Queensland and New South Wales. Additionally, it is responsible for a pulse packing and trading operation.
The relationship between SALIC and Olam Group commenced in 2022 when the Saudi company invested US$1.24 billion to acquire a 35.4% stake in Olam Agri. At that time, SALIC’s Group CEO, Sulaiman Al Rumaih, highlighted that this investment was integral to the company’s strategy for enhancing food security. “SALIC’s primary strategic goal is to bolster global and domestic food security through long-term investments in both local and international markets,” Mr. Al Rumaih remarked.
On Sunday, December 29, 2024, Wale Edun, the Minister of Finance and Coordinating Minister of the Economy (CME), announced after a meeting with President Bola Tinubu in Ikoyi, Lagos, that “what we have brought back is investment. What we have brought back is foreign exchange. What we have brought back is jobs for Nigerians.”
This statement followed a high-level delegation's visit to Saudi Arabia, aimed at following up on President Tinubu’s previous discussions with His Royal Highness Prince Mohammed bin Salman Al Saud, Crown Prince and Prime Minister, in Riyadh on November 10, 2023, during the Saudi-African Summit, and again on November 12, 2024, at the Extraordinary Arab and Islamic Summit. During these meetings, both parties explored avenues for cooperation and discussed plans for strategic agricultural investments, among other topics on the summit agenda.
It is understood that the minister may have been alluding to the 2022 acquisition of a 35% stake in Olam Agri for $1.2 billion.