Saudi Arabia picks up SR5.77 billion selling off four government-owned flour mills

Dubai: Saudi Arabia’s multi-billion riyal privatisation of its flour mills industry is now complete.

The Kingdom’s National Center for Privatization and PPP (NCP) and the Saudi Grains Organization, which oversees the industry, are now fully divested from the Second Milling Company and the Fourth Milling Company. The final binding financial bids were submitted on April 19 after due diligence during the bidding phase.

Earlier awards had featured Dubai’s Al Ghurair Investments as part of the winning consortium. In all, four mills have now been sold, netting the government 5.77 billion riyals. In December last, ownership of the First Milling Company was transferred to AlRaha AlSafi Foods for 2.02 billion, and ownership of the Third Milling Company went to Mada and Al Ghurair Ltd. for 750 million.

HSBC Saudi Arabia acted as the sole financial advisor on the privatization with support from NCP.

Winners of the latest

The award of each Milling Company was decided based on the highest financial bids submitted by qualified strategic investors, which were thoroughly reviewed to ensure adherence to the terms stipulated in the Request for Proposal for the second batch of the privatization, in accordance with the privatization of the flour milling, as shown below.

The Second Milling Company was picked up by a consortium of Abdulaziz AlAjlan Sons Co. for Commercial and Real Estate Investments, Sulaiman Abdulaziz AlRajhi International Co., NADEC, and Olam International ltd., after putting up 2.138 billion riyals.

The Fourth Milling Company was won by a grouping of Allana International, Abdullah Al Othaim Markets, and United Feed Manufacturing Company, who bid with 859 million riyals.

The Saudi Arabia flour sector is considered one of the biggest markets for the food staple in the Middle East and North Africa. The winning consortium will be hoping to tap both domestic and export opportunities with the takeovers.