In a move signaling Saudi Arabia’s accelerating drive towards agricultural self-sufficiency, the Saudi Agricultural & Livestock Investment Co. (Salic) is closing in on a deal to acquire full control of Olam Agri Holdings. The transaction, valued at approximately $4 billion, would see Salic, already a significant stakeholder with over one-third ownership, purchase the remaining stake in the agribusiness unit from Singapore-based Olam Group Ltd., according to sources close to the matter. This acquisition could reshape the landscape of global agricultural trade, positioning Saudi Arabia as a pivotal player in food security across the Gulf region and beyond.
The Gulf region, particularly Saudi Arabia, has been aggressively pursuing investments in the agribusiness and food supply chain sectors as part of long-term national strategies. Salic, a state-owned enterprise under Saudi Arabia’s Public Investment Fund (PIF), plays a central role in this endeavor. Since its inception, Salic has channeled billions of dollars into international agricultural assets, focusing on securing staple foods such as grains, rice, and other critical commodities. The Olam Agri acquisition could serve as a vital expansion of these efforts, bolstering Saudi Arabia’s capacity to maintain consistent food supplies despite environmental and geopolitical challenges.
“Saudi Arabia is strategically investing in agricultural production across the globe to mitigate risks associated with local food production limitations,” says Dr. Ahmed Al-Motawa, a professor of agricultural economics at King Saud University. “By acquiring Olam Agri, Salic not only increases its direct access to essential food resources but also strengthens its leverage in the international agribusiness market.”
The agreement, while not finalized, is reportedly in its advanced stages and expected to close at a valuation around $4 billion. In 2022, Salic purchased a 35.4% stake in Olam Agri for $1.24 billion, with the current negotiation reflecting the continued profitability and strategic value of Olam Agri. Following the deal’s announcement, Olam Group shares surged as high as 9.4% on Friday on the Singapore Exchange, marking the largest intraday gain since August 2023 before slightly tapering.
While Salic declined to provide comment on the deal, insiders indicate that the acquisition will allow the Saudi firm to gain direct control over Olam Agri’s extensive portfolio of commodities, which spans grains, edible oils, and other food products. This addition would fit seamlessly into Salic’s mission of supporting Saudi Arabia’s food security goals by establishing robust, diversified sources of agricultural products domestically and abroad.
Olam Group, a global agribusiness giant, has long been a vital player in the worldwide supply of various agricultural products, from grains to edible oils to packaged foods like pasta. Olam Agri was established as part of a restructuring effort in 2020, with the aim of strengthening core business units to cater to diverse markets and demands. Initially, Olam had considered a public listing of the agribusiness unit on exchanges in Singapore and Riyadh, but those plans were later postponed due to market volatility and strategic reassessment.
Olam’s pivot to divest its remaining shares in Olam Agri may reflect an evolving strategy to concentrate on other growth areas within its organization. In recent years, Olam has streamlined its operations, focusing on high-growth sectors like food ingredients, consumer goods, and sustainability initiatives in emerging markets. For Olam, the sale of its remaining stake in Olam Agri is expected to generate significant capital, which it could redeploy to expand its core businesses.
Salic’s drive to expand its agricultural portfolio aligns closely with Saudi Arabia’s Vision 2030, an ambitious initiative led by Crown Prince Mohammed bin Salman aimed at diversifying the Saudi economy beyond oil dependency. The Vision 2030 framework underscores the importance of food security as an element of national resilience, especially in light of global supply chain disruptions.
The COVID-19 pandemic and ongoing geopolitical tensions have underscored the risks inherent in relying solely on imports for essential food supplies. As such, Saudi Arabia has turned to strategic acquisitions and foreign partnerships to develop a resilient food infrastructure. Salic, backed by the financial strength of the PIF, has been instrumental in these efforts. Its investments span several continents, from rice and wheat farms in Asia to livestock production facilities in Australia and South America.
“Through Vision 2030, Saudi Arabia is effectively preparing for a future where access to food resources may become as critical as access to energy resources,” explains Sarah Al-Qurashi, a Riyadh-based political analyst. “The acquisition of Olam Agri would provide Saudi Arabia with direct control over supply chains and food production capabilities that transcend borders.”
Olam Agri, headquartered in Singapore, manages an extensive portfolio that includes the production and distribution of staple crops and processed foods. It has established a strong presence across emerging markets in Asia, Africa, and the Middle East—regions that are among the most vulnerable to food security risks due to climate change and economic instability.
The acquisition by Salic could enable Olam Agri to expand its operations further, leveraging Saudi Arabia’s resources to scale its reach. Saudi Arabia itself has been expanding infrastructure projects that accommodate food processing and logistics, ensuring that produce reaches local and regional markets faster and more efficiently.
In addition to grains and edible oils, Olam Agri also supplies animal feed and ingredients used in processed foods, making it a critical supplier for large-scale food manufacturers worldwide. For Saudi Arabia, integrating these resources into its national food chain offers both supply stability and economic influence in the broader Gulf region.
Saudi Arabia’s expanding portfolio in international agribusiness is likely to have ripple effects across the Middle East, where food security has long been a pressing issue due to arid climates and limited arable land. Countries like the UAE and Qatar have launched similar initiatives, investing in agricultural technologies and foreign partnerships to buffer themselves against supply disruptions. However, Saudi Arabia’s focus on owning and controlling the production end of the food supply chain distinguishes its approach from others in the region.
“Saudi Arabia’s focus on direct acquisition of agricultural companies sets a precedent,” says Farid Hassan, a Middle East economic policy analyst. “This is more than just investing in foreign farmland; it’s about complete control over production, supply chains, and ultimately, pricing.”
As Salic moves toward finalizing the Olam Agri acquisition, other Gulf countries may look to follow suit, potentially leading to a new wave of investment in agribusiness from the region. Industry experts speculate that these trends could accelerate a Gulf-led consolidation of international agricultural supply chains, establishing the Middle East as an increasingly influential player in global food production and distribution.
