Time: March 29, 2018
Saudi Arabia’s National Agricultural Development Co., better known as Nadec, has acquired a majority stake in Al Safi Danone (ASD), which is a joint venture between Groupe Danone of France and Saudi based Al Faisaliah Group. Nadec has acquired a 62.2% of ASD and the existing Al Safi Danone shareholders will own the remaining 38.8% in the company.
Global law firm Baker McKenzie has acted on behalf of Saudi Arabia’s of Al Faisaliah Group for the sale of their share
The deal will help consolidate Nadec’s and ASD’s business in the dairy industry in Saudi Arabia by reinforcing their position to create a leading regional dairy and beverage player, and will extend their geographic reach.
The acquisition will give Nadec an opportunity to utilize Danone’s global expertise and also increase their scale, both within the kingdom and regionally. Al Safi Danone also operates the world’s largest integrated dairy farm, with some 50,000 cows producing more than 1 million liters of fresh milk every day. Nadec owns six dairy farms that host approximately 75,000 cows and two processing plants that produce over 1.5 million liters of milk per day.
Although this acquisition will help Nadec increase their production significantly, they will still remain the second largest dairy producer in Saudi behind diary giant Almarai, which has a market cap of $14.73 billion. Nadec is far behind with a market cap of just $880 million.