In January 2020, Olam Group Limited (“OGL”, and together with its subsidiaries, “Olam Group” or “the Group”) announced a strategic Re-organisation of its diverse and complex business portfolio. The aim was to streamline operations and unlock shareholder value by segmenting the company into three distinct operating entities: ofi (Olam Food Ingredients), Olam Agri, and the Remaining Olam Group. This separation allowed each entity to operate with greater independence and strategic clarity, enabling more focused efforts in capital raising, potential carve-outs, and targeted asset divestments. By January 2022, this structural transformation had been completed, marking a significant milestone in Olam Group’s journey toward operational and financial optimisation.
On February 24, 2025, Olam Group announced its intention to sell the remaining 64.57% stake in Olam Agri to Saudi Agricultural & Livestock Investment Company (“SALIC”), a move that signals the next major phase of the Group’s broader corporate transformation. In light of this transaction, the Group has now unveiled the details of its Updated Re-organisation Plan, which outlines a three-pronged strategy to solidify financial health, accelerate shareholder returns, and sharpen business focus going forward.
Three Key Pillars of the Updated Re-organisation Plan
The Updated Re-organisation Plan is built around three core objectives that aim to strengthen Olam Group’s financial position, drive value for shareholders, and provide a clear path forward for its remaining business arms.
- De-leveraging and Capital Realignment A significant component of the updated strategy involves right-sizing the capital structure of the Remaining Olam Group. Approximately US$2 billion of the expected cash inflows will be allocated toward reducing the Group’s debt, thereby rendering the Remaining Group debt-free and self-sustaining. This strategic de-leveraging will enhance financial flexibility, reduce risk, and position the Group for long-term resilience. It will also create a solid foundation upon which the other elements of the plan can be executed optimally.
- US$500 Million Equity Injection into ofi A planned US$500 million equity investment will be directed toward ofi (Olam Food Ingredients), reinforcing its financial strength and strategic agility. Since its formation, ofi has demonstrated resilience amid external disruptions such as the Covid-19 pandemic, commodity price volatility, and geopolitical conflicts like the Russia-Ukraine war. Despite these headwinds, the business has consistently delivered on its medium-term targets, achieving high single-digit Adjusted EBIT growth. This equity injection will support ongoing strategic initiatives, including the exploration of dual public listings in both Europe and Singapore. Furthermore, it enhances ofi’s ability to continue its transformation into a value-added ingredients and solutions powerhouse, primarily through disciplined investments across its Ingredients & Solutions segment.
- Orderly Divestment of Remaining Olam Group Assets The Group also announced plans to responsibly divest all businesses and assets under the Remaining Olam Group banner. Over time, these divestments will be carried out in an orderly and strategic fashion. The net proceeds from these sales will be progressively distributed to shareholders in the form of special dividends, thereby directly returning value. This phased monetisation is designed to optimise timing and market conditions while preserving value for shareholders.
Funding and Execution
The Updated Re-organisation Plan will be funded primarily through two key sources:
- Proceeds from the Sale of Olam Agri Stake: The proposed sale of the 64.57% stake in Olam Agri to SALIC is expected to generate gross cash proceeds of approximately US$2.58 billion. This includes funds from Tranche 1 and the expected future execution of Tranche 2 under a call/put option mechanism.
- Asset Monetisation in Remaining Group: Additional funds will be raised from the divestment of assets within the Remaining Olam Group, continuing the Group’s methodical and value-conscious approach to restructuring.
The sale to SALIC will occur in two phases. Under Tranche 1, Olam Group will sell a 44.58% stake in Olam Agri for US$1.78 billion. The remaining 19.99% will be sold under Tranche 2, via a call/put option mechanism that must be exercised within three years of Tranche 1’s completion. This latter tranche will be transacted at the same base valuation, with an annual return uplift of 6.0% (IRR), bringing the total transaction valuation to a 100% equity value of US$4.0 billion, up from US$3.5 billion during SALIC’s earlier investment.
Shareholder Engagement and Governance
To further enhance shareholder returns, the Group will re-initiate share buybacks under its existing buyback mandate. The renewal of this mandate will be presented for approval at the upcoming annual general meeting. The company also affirmed its commitment to transparency, pledging to update shareholders on material developments in relation to the Updated Re-organisation Plan through official announcements.
Rationale Behind the Plan
The Updated Re-organisation Plan reflects a thoughtful and multi-faceted approach to value creation. By eliminating debt within the Remaining Group, the company ensures operational autonomy and financial stability. The reinvestment into ofi underlines the Group’s long-term commitment to the food ingredients sector and its ambition to become a global leader in value-added offerings.
Meanwhile, the decision to divest all assets of the Remaining Olam Group is guided by the goal of maximising shareholder returns through strategic monetisation. This route provides a clear path for winding down legacy operations while simultaneously redirecting focus toward growth segments like ofi.
Progress to Date
Since announcing its original Re-organisation in 2020, the Group has achieved several major milestones:
- In December 2022, it sold a 35.43% stake in Olam Agri to SALIC for US$1.3 billion, based on a then equity valuation of US$3.5 billion.
- In early 2023, it divested its holdings in ARISE IIP and ARISE IS to the Africa Transformation and Industrialization Fund for US$189 million.
- In 2023 and 2024, the Group transferred several key assets—such as its sugar milling operations in India and edible oil refinery in Mozambique—into Olam Agri.
- On February 24, 2025, Olam signed definitive agreements for the sale of its remaining Olam Agri stake to SALIC at a higher valuation of US$4.0 billion, further boosting the Group’s capital position and paving the way for future transformation.
