CCI approves Saudi Arabian PIF's bid for majority stake in Olam Agri

Fair trade regulator CCI on Tuesday approved Saudi Arabia's sovereign wealth fund PIF's proposal to acquire a majority stake in Olam Agri Holdings Ltd.

Public Investment Fund (PIF), through its investment arm SALIC, is acquiring a stake in Olam Agri Holdings Ltd. PIF has assets under management of more than $ 925 billion.

"The proposed combination involves the acquisition of SALIC's proposed indirect acquisition of 44.58 per cent and up to 64.57 per cent of the issued share capital of Olam Agri," the Competition Commission of India (CCI) said in a release.

Saudi Agricultural and Livestock Investment Company (SALIC) is focused on farming and procurement, as well as importing commodities into the Kingdom of Saudi Arabia.

It is present in India through LT Foods Ltd, wherein the investment arm owned a 9.22 per cent stake in the FMCG firm, which owns the 'Daawat' brand of basmati rice.

"Commission approves the Saudi Agricultural and Livestock Investment Company's proposed indirect acquisition of 44.58 per cent and up to 64.57 per cent of the issued share capital of Olam Agri Holdings Ltd," the regulator said.

In December 2022, SALIC acquired a 35.43 per cent stake in Olam Agri.

Singapore-based Olam Agri mainly operates as a merchant and processor of agricultural goods. In India, Olam Agri undertakes the sales of various agri-commodities at the wholesale level, but retails only basmati rice.

After completion of the stake sale, Olam Agri will become a 100 per cent owned subsidiary of SALIC.

In February this year, SALIC entered into an agreement to increase its ownership stake in Olam Agri from 35.4 per cent to 80.01 per cent for $ 1.78 billion.

The transaction also provides SALIC with a call option to acquire the remaining 19.99 per cent within three years. This investment will strengthen SALIC's ability to enhance global commodity supply chains and add value to its subsidiary companies.

"The full acquisition agreement of Olam Agri aligns with SALIC's strategic objectives of diversifying sources of essential commodities, strengthening supply chain integration, and enhancing logistical efficiency across its local and international investments.

"Furthermore, this acquisition underscores SALIC's ambition to secure a key position in the global grains sector," Sulaiman AlRumaih, Group Chief Executive Officer of SALIC, said.

In 2023, Olam Agri generated volumes in excess of 39 million metric tonnes, revenues of SGD 31.3 billion and earnings before interest and tax of SGD 967.7 million.

Deals beyond a certain threshold are required to get approval from the CCI, which keeps a tab on unfair business practices across sectors.