The European Commission has authorised the Saudi Agricultural and Livestock Investment Company (SALIC) to acquire sole control of Olam Agri Holdings Limited, a global agribusiness headquartered in Singapore.

This approval, granted under the EU Merger Regulation, follows SALIC's agreement to purchase an 80.01% stake in Olam Agri for approximately US$1.78 billion.

The transaction aligns with Saudi Arabia's Vision 2030 objectives to enhance food security and diversify economic investments.

Transaction details and regulatory approval

SALIC, a subsidiary of Saudi Arabia's Public Investment Fund, initially acquired a 35.43% stake in Olam Agri in December 2022.

The recent agreement involves purchasing an additional 44.58% stake, bringing SALIC's total holding to 80.01%.

The European Commission's review determined that the merger would not significantly impede competition within the EU market, thereby granting approval under the simplified merger procedure.

Strategic objectives and economic implications

This acquisition is a strategic move by SALIC to bolster its presence in global agricultural markets, particularly in grains, feed, and edible oils.

The deal is expected to enhance Saudi Arabia's access to essential commodities, supporting the nation's food security goals.

The total valuation of Olam Agri at US$4 billion reflects a 14% premium over the previous valuation in 2022.

Future plans and shareholder considerations

Following the completion of the initial transaction, Olam Group retains a 19.99% stake in Olam Agri, with an option to sell this remaining interest to SALIC within three years.

This phased approach allows for a structured transition and potential full acquisition by SALIC. The deal is anticipated to close in the fourth quarter of 2025, subject to final regulatory approvals and customary closing conditions.

The European Commission's approval of SALIC's acquisition of Olam Agri underscores the alignment of this transaction with broader economic and strategic objectives, particularly concerning food security and agricultural investment.