Abu Dhabi’s ADQ to acquire stake in Louis Dreyfus Company

Abu Dhabi: ADQ, one of the region’s largest holding companies has announced Wednesday that it has signed an agreement to acquire an indirect 45 per cent equity stake in Louis Dreyfus Company (LDC), a leading global merchant and processor of agricultural goods.

As part of this transaction, LDC also signed a long-term commercial supply agreement with ADQ for the sale of agri-commodities to the United Arab Emirates (UAE).

As one of the world’s top global players in the agri-commodities sector, LDC is engaged in sourcing, processing, storing, transporting and merchandising agricultural commodities worldwide, thanks to its diversified portfolio and global presence. LDC posted net sales of $16.3 billion and EBITDA from continuing operations of $634 million for the first half of 2020.

Upon completion of the transaction, a portion of its proceeds amounting to a minimum of $800 million will be invested into LDC to support the pursuit of the company’s long-term business plan and strategy, including the acceleration of strategic investments across the value chain, as the company evolves from its traditional role as an agri-commodities merchant to become an increasingly vertically integrated food, feed, fibres and ingredients company. Completion of the agreement is subject to customary closing conditions, including regulatory approvals.

“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,” said Mohamed Hassan Alsuwaidi, CEO of ADQ.

The investment in LDC further strengthens ADQ’s food and agriculture portfolio including Silal, which aims to diversify food sources and increase locally grown, raised and manufactured food; Agthia, which is one of the region’s leading food and beverages companies; and Al Foah, which specialises in date production and processing. Earlier this year, ADQ also signed an agreement to acquire a 50 percent of Al Dahra Holdings, a multinational agribusiness leader that specializes in animal feed and essential food commodities.

“The transaction announced today constitutes a milestone in a decade-long strategy envisioned by the Supervisory Board, which started with the consolidation of LDC’s parent company’s shareholding. We are delighted to welcome ADQ to our shareholder group as long-term partners and investors, with a common vision for LDC’s future, and experience that will bring further value to the business and support the Group’s ambitions,” said Margarita Louis-Dreyfus, Chairperson of the Supervisory Board of Louis Dreyfus Company Holdings.