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%.
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.”