Oran, Singapore

Founded by Singaporean tycoon Sunny Verghese, Olam Group sold its remaining stake in its agribusiness unit to Saudi Agricultural and Livestock Investment Corporation (SALIC), worth $4 billion.

Salic, a subsidiary of Saudi Arabian Public Investment Fund, which already owns 35.4% of the unit, will receive 64.6% of Olam Agri in two drivers, Singapore-listed Olam Olam Group, an investment company that the group will link with the state, accounts for its largest shareholder shareholder (Temasek Holdings) said in a statement on Monday.

According to the first batch, Salic will buy 44.6% of Olam Agri for $1.78 billion, bringing its equity to 80%. It has a call option to acquire the remaining 20% ​​of the company within three years in the second paragraph of the deal.

“The sale of Olam Agri to Salic marks another milestone in Olam's restructuring journey,” said Verghese, co-founder and CEO of Olam Group, in the statement. explain. “Through this deal, we can now focus on seeking strategic choices to unlock the value of its remaining OLAM Group business,” he said.

As part of the deal, Olam and Salic agreed to pay up to $110 million in dividends from Olam Agri's profits generated in the second half of 2024.

The Olam Group board has not yet decided how to use the proceeds of Olam Agri sale, which may include repayments or one-time dividends. According to the deal, it is expected to close in the fourth quarter of this year, with Salic taking 3.5 times the book value of $1.15 billion by the end of 2023.

Olam Group shares received 6.2% to SGD1.20 in afternoon trade in Singapore until the close high of nearly two months. The $4 billion stock implied in the salt and salt transaction is 23% higher than the $3.25 billion market capitalization of Olam Group, which is composed of agribusiness, Olam Food and the rest of Singapore-listed companies. Salic's $3.5 billion valuation of its initial investment in Olam Agri in 2022 is also a 14% premium.

“The acquisition underscores Salic's ambition to secure a key position in the global cereals,” said Sulaiman Alrumaih, CEO of Salic Group.

Olam Agri (producing cereals, edible oils, rice and cotton) is one of the units formed when OLAM is reorganized in 2020. OLAM Food Ingredients – houses the group's cocoa, coffee, edible nuts, spices, spices and dairy cattle businesses – has been seeking to go public on the London Stock Exchange since the company's restructuring.

Olam was founded in 1989 by Verghese, who was included in Singapore’s 50 richest people list until he quit in 2012.