Olam Group Completes Sale of 44.58% Stake in Olam Agri to SALIC
Olam Group Limited has successfully completed the first tranche of its strategic divestment of Olam Agri, marking a significant milestone in its ongoing corporate restructuring efforts. The company confirmed that its wholly owned subsidiary, Olam Holdings Pte. Ltd., has finalized the sale of a 44.58% stake in Olam Agri to the Saudi Agricultural and Livestock Investment Company (SALIC) for approximately US$1.88 billion. The transaction is based on an implied total equity valuation of US$4.00 billion for Olam Agri, subject to customary closing adjustments.
This development represents a pivotal step in reshaping Olam Group’s portfolio and capital structure. With the completion of Tranche 1, SALIC now holds an 80.01% controlling stake in Olam Agri, while Olam Group retains a 19.99% minority interest. As a result, Olam Agri transitions from being a fully consolidated subsidiary to an associated company within Olam Group’s financial structure.
The transaction follows the successful receipt of all required regulatory approvals and the fulfillment of customary closing conditions, underscoring the strategic alignment between both parties and the robustness of the deal framework. The partnership between Olam Agri and SALIC is expected to drive long-term value creation, leveraging shared ambitions in global food security and agricultural development.
Looking ahead, the agreement outlines a clear path toward full ownership of Olam Agri by SALIC. Olam Group retains a put option to sell its remaining 19.99% stake to SALIC at the third anniversary of the Tranche 1 completion. The base consideration for this second tranche is approximately US$799.6 million, along with additional option-related payments and a guaranteed internal rate of return (IRR) of 6%. This structure provides Olam Group with financial certainty regarding the eventual monetization of its remaining stake.
In parallel, SALIC holds a call option that allows it to acquire the remaining 19.99% stake at any point before or on the third anniversary of the initial transaction, under the same financial terms. Upon completion of this second tranche, Olam Agri will become a wholly owned subsidiary of SALIC, completing the full transition of ownership.
Commenting on the development, Yap Chee Keong, Deputy Chairman of Olam Group, highlighted the strategic importance of the transaction within the company’s broader reorganization agenda. He noted that the successful completion of Tranche 1 represents a major advancement in executing the Updated 2025 Re-organisation Plan. The deal not only unlocks substantial shareholder value but also enables the company to optimize its capital structure.
Yap further emphasized that Olam Group will continue to focus on the disciplined divestment and monetization of assets within Olam Group Holdings (OGH), previously referred to as the Remaining Olam Group. At the same time, the company will prioritize growth initiatives within its food ingredients business, ofi (Olam Food Ingredients), with the aim of unlocking its full potential and enhancing long-term shareholder returns.
Sunny Verghese, Co-Founder and Chief Executive Officer of Olam Agri, described the transaction as a transformative milestone for the business. He underscored that SALIC’s acquisition represents a strong vote of confidence in Olam Agri’s capabilities and future prospects. According to Verghese, the partnership positions Olam Agri to accelerate its growth trajectory and reinforce its role as a leading global agri-business.
He further highlighted Olam Agri’s mission to provide essential commodities that meet the growing global demand for food, feed, fuel, fibre, and other agricultural products. With SALIC as a committed long-term investor and a key player in global food security initiatives, Olam Agri is well positioned to expand its operations, enhance efficiency, and drive sustainable growth.
The strategic alignment between Olam Agri and SALIC is expected to unlock new opportunities for scaling operations across key markets, improving supply chain resilience, and advancing innovation in agricultural production and distribution. This partnership also reflects broader global trends, where sovereign-backed investment entities are increasingly playing a critical role in securing food supply chains and supporting agricultural development.
From a financial advisory perspective, Rothschild & Co Singapore Limited served as the lead financial advisor to Olam Group on the transaction. The firm was supported by Citigroup Global Markets Singapore Pte. Ltd. and The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch, which acted as joint financial advisors. Their involvement underscores the scale and complexity of the transaction, as well as its strategic significance in the global agribusiness landscape.
The valuation metrics used in the deal were based on an indicative exchange rate of US$1 to S$1.2778 as of April 24, 2026. This conversion places the transaction value at approximately S$2.4 billion for the 44.58% stake, and S$5.11 billion for the full equity valuation of Olam Agri.
Overall, the completion of Tranche 1 marks a crucial step in Olam Group’s transformation journey. By unlocking value through strategic divestments and forging strong partnerships, the company is positioning itself for a more focused and resilient future. As it continues to execute its Updated 2025 Re-organisation Plan, Olam Group aims to enhance operational efficiency, strengthen its balance sheet, and deliver sustainable value to shareholders.
At the same time, Olam Agri’s transition under SALIC’s majority ownership signals a new phase of growth and expansion, supported by a long-term investor with deep expertise and a strong commitment to global food security.
Source Link:https://www.olamgroup.com/
