Saudi food firms NADEC, Al Safi Danone to discuss possible merger

Under the memorandum of understanding, NADEC is proposing to buy all shares of ASD and in exchange offer new NADEC shares to ASD’s current shareholders, which will be implemented through a capital increase.

  
An investor walks past a screen displaying stock information at the Saudi Stock Exchange (Tadawul) in Riyadh, Saudi Arabia. Image used for illustrative purpose.

An investor walks past a screen displaying stock information at the Saudi Stock Exchange (Tadawul) in Riyadh, Saudi Arabia. Image used for illustrative purpose.

REUTERS/Faisal Al Nasser
DUBAI: National Agricultural Development Company (NADEC) and Al Safi Danone Company (ASD) have entered into a non-binding agreement to explore a possible merger.

“The term of the MOU [Memorandum of Understanding] is for a period of six months. The parties have agreed on an exclusivity period during which they will conduct financial, commercial and legal due diligence,” NADEC said in a disclosure to the Saudi stock exchange.

Under the memorandum of understanding, NADEC is proposing to buy all shares of ASD and in exchange offer new NADEC shares to ASD’s current shareholders, which will be implemented through a capital increase.

“Subject to confirmation during the due diligence phase, at completion of the Proposed Transaction, the current ASD shareholders will, in aggregate, own 38.75 percent of NADECs pro forma issued share capital,” NADEC told the Saudi bourse.

ASD, engaged in the production of fresh dairy products and juices, is a joint venture between Saudi Arabia’s Al-Faisaliah Group and French food firm Danone Group.

“The Proposed Transaction will be subject to a number of conditions including, without limitation, entry into definitive agreements, NADECs EGM approval and ASDs shareholder approvals and obtaining the necessary approvals from the relevant government authorities,” NADEC said.

“The entry into these discussions does not guarantee that the Proposed Transaction will be completed.”

Copyright: Arab News © 2017 All rights reserved. Provided by SyndiGate Media Inc. (Syndigate.info).

More From Equities