Abu Dhabi to create food and beverage behemoth in a share swap deal

Senaat, owned by ADQ, submits a non-binding offer to transfer the majority of shares in date processing firm Al Foah to Agthia

Abu Dhabi plans to combine two food and beverage companies including Al Foah and Agthia. Alamy

Abu Dhabi plans to combine two food and beverage companies to create a leading F&B player in the Mena region after industrial conglomerate General Holding Corporation (Senaat), owned by ADQ, submitted a non-binding offer to the board of Agthia Group to swap its shares in date processing company Al Foah.

Senaat is the sole shareholder of Al Foah, which is the world’s largest date processing and packaging company.

“The proposed transaction would combine two leaders in their complementary food and beverage product categories to create one of the top ten consumer food and beverage players in the Mena region,” ADQ, said. “The combined entity will also become a domestic champion in four essential categories, water, dates, flour, and animal feed.”

Under the proposal, Senaat would transfer the entire issued share capital of Al Foah to Agthia for 120 million convertible shares in Agthia at Dh3.75 a share. If finalised, Senaat would own 59.17 per cent of Agthia, from 51 per cent currently.

“We see this proposed transaction as the integration of two leading operators in their respective categories that will create a national food and beverage champion,” Mohamed Hassan Alsuwaidi, chief executive of ADQ, said.

Founded in 2005, Abu Dhabi based Al Foah sells an average of over 108,000 metric tonnes of dates annually. The company also exports a significant amount of its production to 45 countries around the world including India, Indonesia, and Bangladesh. In 2019, Al Foah’s revenue reached Dh504 million with a net income of Dh83m in 2019.

ADQ, set up in 2018, holds government stakes in companies spanning key sectors of Abu Dhabi’s non-oil economy, including utilities, tourism and hospitality, aviation, transportation, logistics, industrial, real estate, media, healthcare, agri-foods and financial services.

Its portfolio includes Abu Dhabi Power Corporation, Emirates Nuclear Energy Corporation, Abu Dhabi Airports, Abu Dhabi Ports, Etihad Rail and Seha, among others. Last month, ADQ acquired 22.25 per cent of the Middle East's biggest courier company, Aramex.

Senaat expects to close Al Foah transaction before or during the first quarter of 2021, subject to the receipt of all required regulatory approvals.