General Holding Corporation, better known as Senaat, the sole shareholder of Al Foah Company, the world’s largest date processing and packaging company, announced on Tuesday that it has submitted a non-binding offer to the board of regional food giant Agthia Group.
The offer sets out the principal terms and conditions on which the majority of Al Foah’s business would be transferred to Agthia.
The proposed transaction would combine two majors in their complementary food and beverage product categories to create one of the top 10 consumer F&B players in the MENA region, a statement said.
The combined entity will also become a domestic champion in four essential categories – water, dates, flour, and animal feed, it said.
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.
It added that the combined entity will also expand its breadth of consumer products, especially in the more premium end of the date market value chain while increasing competitive access to new market segments, such as supermarkets, hotels, restaurants and cafés, as well as export markets in Europe, the US and Asia.
Senaat said the proposed transaction offers shareholders a “value-accretive deal with opportunities for several revenue-enhancing and cost-saving synergies”.
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 AED3.75 per share. This implies an equity value of AED450 million for Al Foah. Post conversion into shares, Senaat would own 59.17 percent of the entire issued share capital of Agthia, up from the 51 percent it currently owns in the group.
Mohamed Hassan Alsuwaidi, CEO of ADQ, parent company of Senaat, said: “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.”
Mohamed Hassan Alsuwaidi, CEO of ADQ
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.
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 AED504 million and net income of approximately AED83 million in 2019.
Headquartered in Abu Dhabi, ADQ was established in 2018 as a public joint stock company and 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.