Savola Group is reportedly considering selling its stake in Saudi Arabian peer Almarai Co.
Citing unnamed sources, Bloomberg has reported Savola Group is working with US investment bank Moelis & Co. to find potential suitors for part or all of its 34.52% stake in Almarai.
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Almarai offers a range of products in the fresh laban, cheese, juice, baked goods and poultry categories.
Bloomberg reported talks were still at an early stage and a deal was not guaranteed.
Savola’s stake in Almarai is reportedly worth “about $5.4bn based on Monday’s trading”.
The Saudi kingdom’s Public Investment Fund has a 16% holding in Almarai via a subsidiary.
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By GlobalDataJust Food has approached Savola Group and Almarai for comment.
Savola tends to invest to in food and drinks businesses through its subsidiary Savola Foods. Last year, the group acquired the Egyptian Belgian Company for Industrial Investments (Egybelg).
The Arab News publication, quoting Savola CEO Hassan, said the deal was struck for E£622m (then $33.1m). As part of the deal, Savola planned to invest E£1.7bn in Egypt over the next two years, Arab News reported at the time.
In 2022, Savola Group generated sales of SR28bn ($7.45bn), up from SR24.7bn the previous year. The group reported gross profit of SR4.8bn compared to SR4.48bn the previous year.
Earlier this month, Almarai approved an investment of SR405m to expand its bakery segment in light of recent growth. The investment plan will be financed by the publicly-listed company’s internal cashflows and is expected to be completed over two years.
Almarai reported revenues of SR18.7bn for the fiscal year ended December 2022, an increase of 18.1% over 2021. In 2022, the company’s operating margin was 12.2%, compared to an operating margin of 12.7% in the previous year. For the second quarter ended June 2023, the company reported revenues of SR4.8bn, a decrease of 5.4% over the previous quarter.
