By leveraging Agthia’s marketing and packaging expertise and its extensive network, the combined entity will expand its breadth of consumer products, especially in the more premium end of the date market value chain. It will also increase the combined entity’s competitive access to new market segments, such as supermarkets, hotels, restaurants and cafés, as well as export markets in Europe, the US and Asia. In addition, stronger supply chain relationships, distribution, sales and marketing channels would allow for long-term cost savings.
Attractive Offer for Agthia Shareholders
The proposed transaction offers shareholders a value-accretive deal with opportunities for several revenue-enhancing and cost-saving synergies, thereby creating a more robust consumer F&B platform with strong international prospects. The deal will also further strengthen Agthia’s balance sheet, giving it additional financial power and flexibility for potential acquisitions in the future.
The non-binding offer sets out the principal terms and conditions by which Senaat would transfer Al Foah to Agthia. As per the proposal, Senaat would transfer the entire issued share capital of Al Foah to Agthia. In consideration for the share transfer, Agthia would issue to Senaat a convertible instrument, convertible into 120 million ordinary shares in Agthia upon closing of the transaction. The price at which the convertible instrument will convert into shares in Agthia is AED 3.75 per share. This implies an equity value of AED 450 million for Al Foah. Post conversion into shares, Senaat would own 59.17% of the entire issued share capital of Agthia, up from the 51% it currently owns in the Group.
In alignment with the strategic objectives of the deal to expand further as a diversified FMCG leader in the region, Al Foah’s organic date farm in Al Ain would not be included as part of the deal. The combined entity would focus on strengthening core activities of processing, sales, and marketing, and would plan to continue sourcing produce from Al Foah’s existing network of farmers.
H.E. Mohamed Hassan Alsuwaidi, CEO of ADQ, commented: “We see this proposed transaction as the integration of two leading operators in their respective categories that will create a national F&B champion. The combined company will have the scale, strength and ambition to create one of the top 10 F&B players in the Middle East. We also see an opportunity to leverage Agthia’s expertise in FMCG brands across Al Foah’s world-class date offering to help accelerate sales in established and new markets and categories. This will in turn benefit Al Foah’s valued community of Emirati date farmers by increasing demand for their locally-farmed produce and protecting an essential part of our proud heritage.”
Leading Superfood Company
Founded in 2005, Abu Dhabi based Al Foah is the largest date processing and packaging company in the world, selling an average of over 108,000 metric tons annually over the last four years. Over the last 15 years, the company has developed a leading position in the UAE date market, with a strong nation-wide sourcing and receiving network and industry-leading utilisation rates at its processing centre and cold storage facilities. Today, the company exports a significant amount of its production to 45 countries around the world, with significant exposure to high-growth Asian markets such as India, Indonesia, and Bangladesh. Al Foah achieved revenues of approximately AED 504 million and net income of approximately AED 83 million in 2019.
As a rapidly emerging superfood with multiple nutritional and health benefits, as well as versatility across wide-ranging consumer F&B products, the global date market is witnessing high demand with a growth rate of 5% per year. Supply dynamics are favourable, with dates being consumed as fruits and increasingly processed into value-added segments experiencing rapid growth. For example, Al Foah has been accelerating in recent years with products such as date paste, syrups, and confectionery. These encouraging market fundamentals are positioning players across the date market supply chain, including Al Foah, for further growth.
If the Board of Agthia recommends the offer, and it is subsequently approved by the shareholders of Agthia, then Senaat anticipates closing this transaction before or during Q1 2021, subject to the receipt of all required regulatory approvals.
Headquartered in Abu Dhabi, ADQ was established in 2018 as a public joint stock company (PJSC). It holds a diverse portfolio of major enterprises spanning key sectors of Abu Dhabi’s economy, including utilities, tourism and hospitality, aviation, transportation, logistics, industrial, real estate, media, healthcare, food and agriculture, and financial services.
As a strategic partner of the Government of Abu Dhabi, ADQ is committed to supporting the development of Abu Dhabi as a modern, competitive, prosperous and sustainable economy. ADQ stimulates value creation by developing prominent cluster ecosystems and instilling a performance culture across its portfolio of companies. ADQ is also an asset owner and investor in target sectors, both locally and internationally, which align with Abu Dhabi’s leadership vision.
For more information visit adq.ae or write to email@example.com.
About Al Foah Company
Al Foah is owned by SENAAT, which is part of ADQ, one of the region’s largest holding companies with a broad portfolio of major enterprises spanning key sectors of Abu Dhabi’s diversified economy. Al Foah was established in 2005 by the Abu Dhabi government to take responsibility for a number of date production and process assets, including an organic date farm in Al Ain, two date processing factories in Al Saad and Al Marfa, and a number of date receiving centres across the UAE. Al Foah’s headquarters are located in Al Ain.
Al Foah’s product portfolio consists of a wide range of high-quality UAE-grown whole dates, value-added dates (stuffed and chocolate coated) and date-based products including date syrup, date paste and date halwa. Al Foah produces an average of over 108,000 metric tons annually, of which 90% is exported to 45 countries across the world, including the top ten global markets for dates such as the UAE, India, Oman, Bangladesh, Morocco, Indonesia, Jordan, and Sri Lanka.
© Press Release 2020