SALIC to acquire 9.2% stake in basmati rice producer LT Foods for $55.6m

The Saudi Agricultural and Livestock Investment Company (SALIC) has agreed to acquire a 9.2% stake in LT Foods, an Indian basmati rice processing company, for a total consideration of approximately SAR 209 million (approximately INR 455.5 crores or $55.6 million).

The stake acquisition is being done by the fully-owned subsidiary of the Saudi Public Investment Fund to help achieve Saudi Arabia‘s food security targets. Saudi Public Investment Fund is a sovereign wealth fund of Saudi Arabia.

SALIC will buy a 7.89% direct stake in LT Foods at INR 142.23 per share and an additional 1.33% equity stake through a secondary share purchase from the Promoters Group.

The promoters of the Indian basmati rice producer will continue to keep the majority stake of 51%.

The closing of the deal is subject to the required regulatory approvals.

Sulaiman AlRumaih — SALIC Group CEO said: “The extension of our partnership with LT Foods is in-line with SALIC’s strategy to contribute to the food security objectives.

“Our 3 years old investment in Daawat Foods Ltd., gave us an understanding of the management style of LT Foods, their market and business understanding and their deep commitment to sustainability, innovation to always serve its consumers better.

“This gave us the confidence to increase our investment in LT Foods and build a strong strategic partnership with the Company.”

SALIC to acquire 9.2% stake in Indian basmati rice producer LT Foods for $55.6m. Image courtesy of SALIC (Saudi Agricultural and Livestock Investment Co.)

The Indian basmati rice processing company will use the proceeds to repurchase Salic-owned 29.5% equity stake in its subsidiary Daawat Foods for INR 175.8 crores, thereby becoming the 100% stakeholder post-closing.

Vijay Kumar Arora — LT Foods chairman said: “Our partnership with SALIC is strategic in nature and goes beyond financial investment. The tripling of investment in LT Foods by SALIC is an expression of their confidence in our ability to grow faster than the market.

“Together, we have developed a deep understanding of the needs of consumers in the Middle East related to food products and it will open doors for LT Foods to further strengthen its presence in this segment.”

Avendus Capital and Kotak Investment Banking served as financial advisors to LT Foods and SALIC, respectively, while AZB & Partners and Cyril Amarchand Mangaldas acted as legal advisors, respectively.

LT Foods, which delivers rice and rice-based food brands in over 60 countries, reported consolidated revenue of approximately INR 5,451 crores as of the financial year 2022.

LT Foods’ flagship brands include Daawat and Royal.

In 2020, SALIC acquired a 29.5% stake in Daawat, one of the major rice processing subsidiaries of LT Foods in India.