Savola Group to Acquire 51% Ownership of Al Kabeer
The Jeddah, Saudi Arabia-headquartered Savola Group has signed a binding agreement to buy 51% of Al Kabeer, a major producer and marketer of frozen food products in Saudi Arabia, the United Arab Emirates, Bahrain and Oman. It is anticipated that the deal, valued at SAR 565.5 million, will be finalized within six months.
Founded in 1978, Al Kabeer has evolved during the past four decades into a group with processing plants, cold storage facilities and offices in more than 15 countries. The company offers more than 300 frozen halal products that range from value-added meat, poultry, seafood and vegetables to ready meals. Distribution is primarily through over 20,000 retail outlets in GCC countries and markets further afield.
“We are excited about the prospects of this transaction and adding a brand such as Al Kabeer into our portfolio of leading consumer brands in regional food and retail sectors,” said Anees Ahmad Moumina, chief executive officer of the Savola Group. “The investment represents building on the main pillars of our strategic portfolio, which spans food and retail sectors across the region.”
Huda Al Lawati, the company’s chief investment officer, added: “The partnership is in line with Savola’s strategy to expand its portfolio and enter attractive, value-added categories within the overall food sector. The frozen food segment is forecast to continue growing, propelled by the increasing drive towards value and convenience.”
The deal will be financed through a combination of operating cash flow and bank loans. The expected positive impact of the purchase will likely be reflected in Savola results posted during the second half of 2018.