UAE-based food major Agthia on Monday announced that its board of directors has agreed to proceed with a strategic transaction to combine with Al Foah Company, the world’s largest dates processing and packaging company based in Abu Dhabi.
The board will recommend to Agthia shareholders that they approve the offer received from General Holding Corporation (Senaat) on October 6 to combine with its wholly owned subsidiary.
The deal will create one of the 10 biggest consumer F&B players in the MENA region by revenue.
The key terms of Senaat’s offer are to transfer Al Foah, excluding its organic date farm in Al Ain, to Agthia in consideration for the issuance by Agthia to Senaat of a convertible instrument, into 120 million ordinary shares in Agthia upon closing of the transaction.
The deal implies an equity value of AED450 million for Al Foah. Following the conversion, Senaat would own 59.17 percent of the entire issued share capital of Agthia, up from the 51 percent it currently owns, a statement said.
Alan Smith, CEO of Agthia Group, said: “Agthia remains committed to our strategy of growing operations across regional markets, expanding market share and diversifying our product offerings. We see the transaction with Al Foah as a key enabler to accelerate our ambitions, bringing together two UAE leaders in their respective food and beverage product categories to create one of the top 10 consumer F&B players in the MENA region by revenue.
“We expect the deal to be immediately accretive to Agthia’s shareholders with its significantly value-enhancing potential. It will serve to further strengthen the company’s balance sheet, offering multiple revenue and cost synergies as well as the potential for further international expansion in the fast-growing date market.”
Alan Smith, CEO of Agthia Group
He added that the combined entity will become a domestic champion in four essential categories – water, dates, flour, and animal feed.
The transaction will now be put forward to Agthia’s general assembly and is subject to regulatory and shareholder approvals.
Abu Dhabi-based Agthia Group said in July that the e-commerce side of the company increased 100 percent during the lockdown period, although it wasn’t enough to prevent a 48 percent plunge in net income in the first half of the year.
Al Foah Company is the world’s largest dates processing and packaging company based in Abu Dhabi
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.
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