Saudi group to buy top EU farm producer
Riyadh, March 31, 2013
Saudi-based United Farmers Holding Company (UFHC) is set to buy out Continental Farmers Group (CFG), a top European agricultural producer in a deal valued at SR350 million ($93.3 million), said the company's founding shareholder Almarai.
As per the agreement, the Saudi consortium will acquire all of the issued and to be issued share capital of CFG by paying cash, said Almarai, which holds 33 per cent of the share capital in United Farmers Holding Company.
Besides Almarai, the UFHC's partners include Saudi Agricultural and Livestock Investment Company and Saudi Grains and Fodder Holding.
The offer consists of cash and deferred consideration and values CFG at a maximum of SR350 million, said the Almarai in a statement.
Under the new agreement, CFG shareholders will receive 35 pence in cash for each CFG share and up to a further 2 pence in cash for each CFG share by way of deferred consideration (the Basic Offer) unless they elect to receive 36 pence in cash for each CFG share (the Cash Alternative).
Commenting on the offer, Dr Khalid Al Malahy, the director of UFHC, said, "Our investment strategy is to make long-term investments in the agricultural sector, with the principal objective of developing sustainable sources of food, grain and fodder on a global scale."
UFHC, he stated, is well-positioned to support the proposed growth of CFG, both financially and through the experience of the consortium members in the international agricultural markets.
CFG is a diversified agricultural producer whose principal activity is the cultivation and distribution of arable crops. It boasts of a strong track record in yield improvement operational efficiencies and economies of scale.
A major player in the European market, CFG has under management approximately 23,400 hectares in Ukraine and 2,700 hectares in Poland.
The CFG directors have been advised by leading advisorry firm Deloitte.
Nicholas Parker, the chairman of CFG, said the board of the Polish group was delighted to recommend unanimously this offer from UFHC.
"The offer represents an attractive premium to the current and historic share price of CFG for shareholders. For the company, it brings access to substantial capital and to the expertise of the members of the consortium in the international agribusiness sector," remarked Parker.
"The offer recognises that the CFG business is highly scalable and represents an excellent opportunity for CFG to accelerate the development of its operations," he added.-TradeArabia News Service
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