Get the app today! Download iPhone App Download Android App

Saudi Dairy Producer to Hold Talks With Danone Unit for Merger

Published on Oct 9 2017 8:39 AM in A-Brands tagged: Trending Posts / Saudi Arabia / Danone / National Agricultural Development Co

Saudi Dairy Producer to Hold Talks With Danone Unit for Merger

National Agricultural Development Co., the Saudi dairy producer part owned by the kingdom’s sovereign wealth fund, plans to start talks with Danone SA’s venture in the country for a potential combination.

Shareholders of the privately-held Al Safi Danone will own 38.75 percent of National Agricultural Development Co. at the completion of the proposed transaction, according to a statement to the Saudi stock exchange. The companies signed a six-month non-binding MoU to conduct financial, commercial and legal due diligence.

Possible Merger

The merger plan follows banking and insurance companies in Saudi Arabia starting talks on potential combinations. HSBC Holdings Plc and Royal Bank of Scotland Group Plc’s ventures in the kingdom are exploring a potential merger, while at least four insurance companies said earlier this year that they are studying plans for the same.

The food industry has also been rife with mergers and acquisitions lately. Last month, Danone bought a stake in Yooji, a French maker of frozen organic baby food. Also in September, Nestle SA bought Sweet Earth, a maker of frozen meals and chilled, plant-based burgers, while Unilever purchased Pukka Herbs, a rapidly expanding organic tea company.

Paris-based Danone and Saudi Arabia’s Al Faisaliah Group Holding formed Al Safi Danone in 2000, with the French yogurt maker holding a 50.1% stake.

National Agricultural Development shares climbed as much as 6.6 percent in Riyadh on Sunday, taking its gain this year to 36 percent. The company has a market capitalization of about $700 million.

News by Bloomberg, edited by ESM. Click subscribe to sign up to ESM: The European Supermarket Magazine.

Share on Facebook Share on Twitter Share on Google+ Share on LinkedIn Share on Tumblr Share via Email