Olam eyes dual-listing in Singapore and Saudi Arabia amid growth plans targeting the Middle East

10 Jan 2023 --- Commodity trading company Olam plans to pursue a listing its agribusiness unit in Singapore and Saudi Arabia as early as the first half of 2023, with Singapore as the primary listing and Saudi Arabia as a potential opportunity for a concurrent listing.

“We are exploring a dual-listing in Singapore and Saudi Arabia – which would be the first of its kind – to tap into our strong Singapore and global shareholder base while welcoming investors in the Middle East, a region we intend to grow further,” says Sunny Verghese, co-founder and Group CEO of Olam Group and CEO of Olam Agri.

Olam will become the first ever listing in Saudi Arabia of a non-Gulf Cooperation Council incorporated business if it succeeds in its endeavor. Olam sees the move as an opportunity to fill the Gulf’s demand for edible oils, rice and corn.

The Initial Public Offering (IPO) initiative comes after Olam sold to The Saudi Agricultural and Livestock Company (SALIC) a minority stake (35.4%) of Olam Agri Holdings for US$1.24 billion in December 2022. This gives the agricultural arm of the business a valuation of US$3.5 billion.

Choosing Singapore and Saudi Arabia
The business has chosen Singapore as its primary listing site given the solid investor base for food and agri-business companies in Singapore, adding to the “continued long-term support of its shareholders,” explains Olam.

The agricultural arm of the business has a valuation of US$3.5 billion.“The additional listing in Saudi Arabia is being considered given the importance of food security in the Gulf region, the large incremental investor base that would be able to participate in the IPO, and the new strategic partnership with SALIC, which will further enhance Olam Agri’s activities in the Gulf region, particularly Saudi Arabia, among other factors,” details the business.

Olam Group is already listed in the Singapore stock exchange – being one of the top 30 largest primary listed companies in market capitalization on the SGX-ST – and will remain listed if its agribusiness IPO goes through. The stock is up 3.9% today after announcing its strategic business plans. 

Booming business
With the partnership with Saudi’s SALIC the business is in a position to expand in more diverse markets as the war in Ukraine and food shortages have driven investment toward food security.

“Olam Agri has demonstrated a consistent performance track record with operating profit rising at a CAGR of 40.1% over the last three years, capitalizing on its position in emerging markets even amid challenging macroeconomic conditions and rising geopolitical uncertainty,” explains Verghese.

The planned listings would allow Olam to capitalize on the key trends in their respective sectors and strengthen their respective balance sheets, improve access to capital markets, broaden their shareholder base, and allow them to be better understood and valued as standalone entities with very different business propositions,” he continues. 

In September 2022, Saudi Arabia launched a US$10.64 billion initiative to boost supply chains and tackle food insecurity globally.

By Marc Cervera