Saudi dairy firm Nadec to buy Danone unit via capital raise of $143 mn

Merger and acquisition activity in Saudi Arabia is picking up as slower economic growth encourages companies to combine to save costs

Saudi Arabia’s National Agricultural Development Co., part owned by the sovereign wealth fund, will acquire Danone SA’s venture in the country, creating one of the kingdom’s largest dairy producers.

Nadec, as the company is known, will fund the acquisition of privately held Al Safi Danone through a capital increase of 536 million riyals ($143 million), it said in a statement to the Saudi stock market Sunday. Once the deal is completed, existing Nadec shareholders will own 61.25 per cent of the company, and Al Safi shareholders will hold 38.75 percent.

“The transaction will allow both companies to better serve customers and realize