Singapore-based Olam Group is selling its remaining 64.57% stake in Olam Agri to Saudi Agriculture & Livestock Investment Company ( SALIC ), another sign of the burgeoning trade corridor between Asia and the Middle East.

The deal values the agribusiness at US$4 billion, and is part of Olam’s ongoing reorganization strategy to unlock value for shareholders.

In the first phase, Olam will divest a 44.58% stake in Olam Agri for US$1.78 billion, boosting Salic’s ownership to a controlling 80.01%. Three years after, Olam will offload its remaining 19.99% stake at a valuation reflecting a 6% internal rate of return, raising total proceeds of US$2.58 billion from both tranches.

Combined with Salic’s earlier purchase of a 35.43% stake in 2022 for US$1.29 billion, the full divestment will generate US$3.87 billion for Olam, yielding a total gain of US$2.72 billion.

Olam Agri, a key player in food, feed, and fibre markets, reported revenues of S$31.3 billion in 2023. The US$4 billion valuation reflects a 14% premium over its 2022 price and a 3.47x multiple of its US$1.15 billion book value, underscoring its growth despite global economic challenges.

Olam Group’s co-founder and group CEO Sunny Verghese comments: “Since Salic’s investment in Olam Agri in 2022, our partnership with Salic has unveiled new avenues of growth. With its strategic mandate as a global agrifoods investor and related complementary strengths, Salic and Olam Agri share the same vision and focus on sustainable sourcing and commitment to meet the rising demand for food, feed and fibre. Importantly, this transaction is transformative for Olam Agri.”

“With this transaction, we can now focus our attention on seeking strategic options to unlock value for the remaining Olam Group businesses and ofi ( Olam Food Ingredients ), including the pursuit of an ofi IPO,” he adds.

The deal, subject to shareholder and regulatory approvals, is expected to close in Q4 2025. Olam plans to use the proceeds to repay debt, optimize its capital structure, and potentially issue a one-time special dividend.

Following the transaction, Olam will focus on its remaining businesses, including ofi, a food ingredients subsidiary, and explore strategic options like an initial public offering for the unit.