Olam Group announced plans to divest its remaining 19.99% stake in Olam Agri three years following the completion of the initial phase of the transaction. This strategic move will culminate in SALIC gaining full control over Olam Agri. The announcement, made on Monday, February 24, outlines that the complete divestment will unlock US$3.87 billion in gross proceeds for Olam Group. Consequently, Olam's shares surged by 8.9% in early trading to S$1.230.
The transaction builds upon a previous agreement where Olam sold a 35.43% stake to SALIC in December 2022. Now, with SALIC poised to hold an 80% controlling stake, the value of Olam Agri stands at US$4 billion, marking an increase from the US$3.5 billion valuation last year. Such developments reflect strategic shifts within both companies and significant financial implications for Olam Group.
SALIC Group CEO Sulaiman AlRumaih expressed optimism about the acquisition's alignment with SALIC's broader goals.
"The full acquisition agreement of Olam Agri aligns with SALIC's strategic objectives of diversifying sources of essential commodities… to secure a key position in the global grains sector," – Sulaiman AlRumaih, SALIC Group CEO
For Olam Group, this transaction represents a substantial gain of US$1.84 billion. It also signals a transition towards focusing on its other business ventures. Sunny Verghese, Group CEO of Olam, highlighted the company's renewed focus post-divestment.
"With this transaction, we can now focus our attention on seeking strategic options to unlock value for the remaining Olam Group businesses and ofi, including the pursuit of an ofi IPO," – Sunny Verghese, Group CEO
As part of its future strategy, Olam plans to list its ingredients business, ofi, on the premium segment of the London Stock Exchange, with a secondary listing in Singapore. This move is expected to further enhance the company's market presence and financial robustness.
Leave a Reply