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A Saudi Arabian state-owned investment company has agreed to buy a controlling stake in Singapore-based commodities trader Olam Agri that values the group at $4bn, as the kingdom accelerates efforts to diversify beyond oil and secure critical agricultural supply chains.
Under the deal, Saudi Agricultural & Livestock Investment Company (Salic), a subsidiary of the country’s sovereign wealth fund, will acquire an additional 44.6 per cent stake in Olam Agri for $1.78bn, giving it an 80.01 per cent share in the arm.
“We have become a fully sustainable and integrated food security player and a food industry leader, which is the vision of Salic — to be a regional as well as a global food security company,” Sunny Verghese, chief executive of Olam Group, parent of Olam Agri, said at a press conference.
Shares in Olam Group, which is majority owned by the Singaporean wealth fund Temasek Holdings and listed on the city-state’s exchange, closed 5 per cent higher on Monday.
The deal is part of a wider strategy by Saudi Arabia to secure critical food supply chains as it seeks to shield itself from global commodity shocks and reduce its reliance on imports.
The Gulf state imports more than 80 per cent of its food and has been accelerating its investments in agribusiness, farming and food logistics as part of Crown Prince Mohammed bin Salman’s economic transformation plan.
Olam Agri is one of the largest global traders of grains, oilseeds and edible oils, giving Saudi Arabia direct access to sourcing and logistics networks across Asia, Africa and the Middle East.
Salic, backed by the kingdom’s $925bn Public Investment Fund (PIF), has been steadily acquiring stakes in food production and agribusiness groups worldwide.
For Olam, the sale is part of a broader restructuring, which began in 2020 when the company split into two main operating units — Olam Agri and Olam Food Ingredients (Ofi).
Olam Agri focused on trading and processing grains, oilseeds and edible oils, while Ofi specialised in higher-margin food ingredients, including cocoa, coffee, dairy, nuts and spices.
Olam Group had previously planned to list Olam Agri on stock exchanges in Singapore and Saudi Arabia, but regulatory challenges delayed those efforts.
Salic now intends to list Olam Agri in Saudi Arabia, where the ownership by a local entity will make regulatory approvals easier.
The timing of the initial public offering remains undecided, with Salic expected to assess the company’s portfolio, potential asset injections, and market conditions before making a decision.
The Olam Agri deal follows Saudi investments in Australian grain production, Ukrainian farmland and Brazilian meatpacking operations.
Salic already owns stakes in key food producers worldwide, including Minerva Foods, one of Brazil’s biggest beef exporters, and UkrLandFarming, a major Ukrainian agricultural group.