The transaction also includes a long-term commercial supply agreement for LDC to sell agricultural commodities to the United Arab Emirates (UAE)
Abu Dhabi’s holding company ADQ has agreed to acquire an indirect 45% stake in Louis Dreyfus Company (LDC), a merchant and processor of agricultural goods.
LDC sources, processes, stores, transports and merchandises agricultural commodities across the world.
The deal also includes a long-term commercial supply agreement for LDC to sell agricultural commodities to the United Arab Emirates (UAE).
The acquisition to strengthen ADQ’s food and agriculture portfolio
ADQ said that the acquisition of equity stake in LDC is expected to strengthen its food and agriculture portfolio and accelerate strategic investments across LDC’s value chain.
The portfolio includes Silal which aims to diversify food sources and increase locally grown, raised and manufactured food; Agthia, which is claimed to be one of the region’s leading food and beverages companies; and Al Foah that specialises in date production and processing.
ADQ CEO H.E. Mohamed Hassan Alsuwaidi said: “Food and agriculture is an attractive, core sector for ADQ to generate financial returns and strengthen the economic cluster locally.
“As one of the world’s leading agri-commodities and food companies, LDC represents a strategic investment opportunity for ADQ.
“With a diversified agri-commodity portfolio, significant scale and broad geographic footprint, LDC will further accelerate the progress we have already made this year in significantly expanding ADQ’s food and agriculture portfolio.”
The company said that the completion of the deal is subject to customary closing conditions including regulatory approvals.
Once the deal is concluded, ADQ is planning to spend a portion of the proceeds amounting a minimum of $800m on LDC to support it to pursue its long-term business plan and strategy.
In September last year, the European Bank of Reconstruction and Development approved a $35m loan to a railcar logistics business in Ukraine, which is fully-owned by LDC.