Savola to distribute 34.52% stake in Almarai to shareholders
Savola is one of Saudi Arabia's biggest food companies
7 February 2024
1 minute read
By: Savola, Saudi Arabia's largest food products company, said on Wednesday it plans to distribute its entire 34.52% stake in regional dairy firm Almarai to its eligible shareholders, reported Reuters.
The deal will be preceded by a 6-billion-riyal ($1.6 billion) rights issue that will help strengthen the company's position, including paying off debt and enabling distribution of shares of Almarai, the biggest dairy firm in the Middle East.
Savola also said its supermarket chain, Panda, has shown signs of healthy recovery in profitability and that it will consider listing the unit in the future.
Savola's shares jumped 3.8%, Almarai's shares were down 3.7% at market open in Riyadh after the announcement was made.
Savola's board has approved the rights issue and the distribution of Almarai shares, both of which are subject to regulatory and shareholder approval.
The objective "is to unlock value for Savola's shareholders, who will benefit from direct exposure to the growth potential and future dividend capacity of Almarai," Savola said in a stock exchange filing.
In October, Savola hired Moelis & Co to advise on strategic options for its business, including a potential sale of a portion of its stake in Almarai.
Saudi Arabia's sovereign wealth fund, Public Investment Fund, owns a 16% stake in Almarai through one of its subsidiaries.
($1 = 3.7502 riyals)
