Saudi dairy firm Nadec to buy Al Safi Danone through $143mn capital increase
Saudi Arabia’s National Agricultural Development Company (NADEC) has agreed to buy Danone’s venture in the country, creating one of Saudi Arabia’s largest dairy producers.
Partly owned by the sovereign wealth fund, Nadec has said it will acquire the privately held Al Safi Danone in a deal which will help it strengthen its dairy business in Saudi Arabia and expand its geographic reach into the UAE, Kuwait, Bahrain, Jordan and Lebanon.
A producer of dairy and juice products, Al Safi Danone is a joint venture between Saudi Arabia’s Al Safi Group of Companies and French food giant Danone.
Under the deal, Nadec shareholders will own 61.25% of the company whilst Al Safi shareholders will hold 38.75%.
- Dairy cooperative Arla to invest a record €527mn to keep up with global demand
- Goldman Sachs invests in pea milk startup Ripple Foods
- Dairy giant Fonterra invests $165mn to boost production at its Victorian and Tasmanian factories
Nadec said that the deal was funded through a capital increase of 536mn Saudi Riyal ($143mn) capital increase but the value of the transaction was not disclosed.
“The Transaction will allow both companies to better serve customers and realise benefits not available on a standalone basis,” said Abdulaziz Al Babtain, managing director of Nadec.
“It will create a platform for future growth and, importantly, drive significant value creation for shareholders. The transaction will also contribute to the goals of Saudi Arabia’s Vision 2030 by strengthening the private sector.”