Saudi Arabia’s National Agricultural Development Co. (NADEC) has announced that it will acquire Al Safi Danone Company (ASD) in a deal that will support to improve the company’s business in the dairy industry in Saudi Arabia and extend its geographic reach.
Al Safi Danone Company (ASD) is a producer of juice and dairy products. It is a joint venture company which is between Saudi Arabia’s Al Safi Group of Companies, and a French food company, Danone. The worth of the contract was not revealed.
Under the contract, Saudi Arabia’s National Agricultural Development Co. (NADEC) will purchase all of the shares in Al Safi Danone Company (ASD). The Al Safi shareholders in exchange will own 38.8 per cent of the National Agricultural Development Co.
The arrangement is a case in point of a private sector driven initiative that the Saudi government hopes will play a very big role to diversify Saudi Arabia’s economy away from the reliance on the revenues of oil.
The Saudi National Agricultural Development Co. has a market capitalization of 3.2 billion riyals which is (853 million USD); this is a little smaller than that of Saudi’s Dairy & Food stuff Company.
Saudi Public Investment Fund owns 20 per cent of the National Agricultural Development Company, with the rest publicly traded on the Stock Exchange of Saudi Arabia.
The company said that the move would aid in developing a broader portfolio and enhance its regional reach out of the Kingdom to Kuwait, Jordan Bahrain, Lebanon, and the United Arab Emirates (UAE) in addition to new frontiers such as Oman and Iraq.
NADEC, Saudi Arabia’s National Agricultural Development Company was established in 1981 by royal decree, it is one of the biggest agricultural and food processing share stock companies in the Middle Eastern and North African (MENA) region and also one of the world’s very few and biggest vertically integrated dairy businesses. The company is a joint stock public company and 20 per cent of it is owned by the government of the Kingdom of Saudi Arabia, with the remaining shares publicly traded on the kingdom’s bourse.
The head office of NADEC is located in Riyadh. The company has 6 dairy farms with around 60,000 cows and a couple of modern dairy plants with an overall capacity of 1.5 million liters of milk per day.