Savola Group is reportedly considering selling its stake in Saudi Arabian peer Almarai Co.
Citing unnamed sources, Bloomberg has reported that Savola Group is working with US investment bank Moelis & Co. to find potential buyers for part or all of its 34.52% stake in Almarai.
Almarai offers a range of products in the fresh laban, cheese, juice, baked goods, and poultry categories.
The discussions, as reported by Bloomberg, are still in the early stages, and a deal is not guaranteed.
Savola’s stake in Almarai is valued at approximately $5.4bn based on Monday’s trading.
The Saudi kingdom’s Public Investment Fund holds a 16% stake in Almarai through a subsidiary.
Savola typically invests in food and drink businesses through its subsidiary, Savola Foods. Last year, the group acquired the Egyptian Belgian Company for Industrial Investments (Egybelg).
The acquisition, valued at E£622m (then $33.1m), was made with the intention to invest E£1.7bn in Egypt over the next two years, as reported by Arab News.
In 2022, Savola Group recorded sales of SR28bn ($7.45bn), up from SR24.7bn the previous year. The group’s gross profit increased to SR4.8bn compared to SR4.48bn in the previous year.
Earlier this month, Almarai approved an investment of SR405m to expand its bakery segment in response to recent growth. The investment will be financed by the company’s internal cashflows and is expected to be completed within two years.
For the fiscal year ended December 2022, Almarai reported revenues of SR18.7bn, an 18.1% increase from 2021. The company’s operating margin for 2022 was 12.2%, slightly lower than the previous year’s margin of 12.7%. In the second quarter of 2023, Almarai reported revenues of SR4.8bn, a 5.4% decrease from the previous quarter.
