Saudi Arabia’s Salic acquires 80% stake in Olam Agri in US$1.78B deal

SAUDI ARABIA – Singapore-based Olam Group Ltd. has finalized a landmark US$1.78 billion deal to sell a controlling stake in its agri-business unit, Olam Agri Holdings, to Saudi Arabia’s state-owned agricultural investment firm, Saudi Agricultural & Livestock Investment Co. (Salic).

The deal, announced on February 24, 2025, values Olam Agri at 4 billion on the Singapore Exchange, 23% higher than the group’s current market capitalization, the Singaporean company said. The group’s shares closed up more than 5% in Singapore at US$1.19 apiece.

The transaction will increase Salic’s ownership in Olam Agri to 80%, marking a significant step in Saudi Arabia’s strategy to secure its food supply chain through global acquisitions. It also underscores Olam Group’s ongoing restructuring efforts to streamline its operations and focus on its core businesses in cocoa and coffee trading.

Sunny Verghese, Olam Group’s founder and CEO, described the deal as a “key milestone” in the company’s restructuring journey, which began in 2020 with the aim of splitting its assets and listing them separately.

“We hope the listing of Olam Agri could be as early as possible,” Verghese said during a briefing in Singapore, noting that the timing would depend on Salic’s decision and potential capital injections. He highlighted Saudi Arabia’s robust capital markets as an ideal environment for listing food and agri-businesses.

Olam Agri, which trades bulk grains and produces a range of products from edible oils to pasta, was created as part of Olam Group’s 2020 restructuring.

The unit had previously pursued initial public offerings (IPOs) in both Singapore and Saudi Arabia, but regulatory hurdles delayed those plans.

In early 2022, Olam agreed to sell a 35.4% stake in Olam Agri to Salic, valuing the unit at US$3.5 billion. The latest deal nearly doubles Salic’s stake and solidifies its control over the agri-business.

With the sale of its agri-business unit, Olam Group will now concentrate on its remaining businesses, particularly its cocoa and coffee trading operations, where it is one of the world’s top traders.

The company’s food ingredients unit, known as ofi (Olam Food Ingredients), was also created in 2020 and has been planning a primary listing on the London Stock Exchange. Verghese emphasized that Olam would explore strategic options to unlock value in its remaining businesses, including ofi.

For SALIC, this acquisition is a strategic step toward diversifying its sources of essential commodities and securing a key position in the global grains sector.

The investment aligns with Saudi Arabia’s broader strategy to reduce its dependence on oil by investing in critical sectors such as agriculture and food production.

Rothschild & Co. served as the lead financial advisor to Olam Group on the deal, with Citigroup Inc. and HSBC Holdings Plc acting as joint financial advisors. The transaction includes a call option, giving Salic three years to acquire the remaining 20% of Olam Agri that it does not already own.

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