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Investing.com-- Olam Group (SGX:OLAG) said on Monday it would exit its agribusiness unit, Olam Agri Holdings, with an initial sale of 44.6% stake to Saudi Agricultural and Livestock Investment Company (SALIC) for $1.78 billion, valuing Olam Agri at $4 billion.
The deal, expected to close in the fourth quarter, will give SALIC an 80.01% controlling stake in Olam Agri. Olam also plans to sell its remaining 19.99% stake to SALIC within three years at the closing valuation.
The sale will generate up to $3.87 billion in gross proceeds for Olam, potentially funding debt reduction or a special dividend, the company said.
Olam will retain full ownership of its other businesses, including its ingredients business, ofi.
“With this transaction, we can now focus our attention on seeking strategic options to unlock value for the Remaining Olam Group businesses and ofi, including the pursuit of an ofi IPO,” said Sunny Verghese, Co-Founder and CEO of Olam Group.
Rothschild & Co, Citigroup (NYSE:C), and HSBC advised Olam on the deal.