Olam to sell remaining stake in Olam Agri for US$2.6 billion, focuses on IPO of business unit ofi

OLAM is divesting its remaining stake in Olam Agri to Saudi Agricultural and Livestock Investment Company (Salic) for US$2.6 billion.

While the board has yet decided on the specific use of the proceeds, Olam’s co-founder and group chief executive officer Sunny Verghese said Olam would continue seeking “strategic options to unlock value” for the other two parts of its business – ofi (Olam Food Ingredients) and the remaining Olam Group – including the pursuit of an initial public offering for ofi.

Shares of Olam Group, which holds about 64.6 per cent of Olam Agri, jumped 5.3 per cent, or S$0.06, to close at S$1.19 on Monday (Feb 24).

The food and agri-business giant announced on Monday before the market open that it had entered into a conditional sales-and-purchase agreement with Salic to dispose of all its remaining shareholdings in Olam Agri in two tranches.

The first tranche involves 44.58 per cent of the stake, or 1.5 billion ordinary shares, in Olam Agri, which Salic will acquire for about US$1.8 billion. This implies an equity valuation of US$4 billion of the whole of Olam Agri.