ADQ snaps up 45% stake in agri-commodities broker Louis Dreyfus

The agreement with the firm controlled by billionaire Margarita Louis-Dreyfus also includes long-term commercial agreement for the sale of agri-products to the UAE

Abu Dhabi's ADQ has agreed to buy a 45% stake in Louis Dreyfus Company. Chris Whiteoak / The National

Louis Dreyfus Company Holdings (LDCH), a company controlled by billionaire Margarita Louis-Dreyfus, signed an agreement to sell an equity stake in its agricultural trading unit to Abu Dhabi’s ADQ.

The company is selling an indirect 45 per cent stake in Louis Dreyfus Company (LDC) to ADQ, one of the biggest holding firms in the Gulf, the companies said in a joint statement on Wednesday.

LDC also signed a long-term commercial supply agreement with ADQ for the sale of agricultural commodities to the UAE, it said.

“The transaction announced today constitutes a milestone in a decade-long strategy envisioned by the supervisory board, which started with the consolidation of LDC’s parent company’s shareholding,” Ms Louis-Dreyfus, chairwoman of LDCH, said.

“We are delighted to welcome ADQ to our shareholder group as long-term partners and investors, with a common vision for LDC’s future and experience that will bring further value to the business and support the group’s ambitions.”

Once the deal is completed, a portion of the proceeds of the sale, amounting to a minimum of $800 million, will be invested into LDC to support the pursuit of the company’s long-term business plan and strategy, including the acceleration of strategic investments.

LDC aims to leverage on global consumption trends through investments in new business opportunities, as it becomes an increasingly integrated food, feed, fibres and ingredients company, LDC's group chief executive Michael Gelchie, said.

“The investment potential created by the long-term partnership with ADQ brings additional strength to the pursuit of LDC’s strategic growth plans, building on the strong performance delivered in the first half of 2020,” he said.

LDC is one of the world's top brokers and processors of agri-goods. Its activities span the entire value chain of farm-to-fork across a range of business lines. Its portfolio includes grains and oilseeds, coffee, cotton, juice, rice and sugar businesses. LDC is active in more than 100 countries and employs about 18,000 people globally.

The LDC deal "represents a strategic investment opportunity in line with our long-term food and agriculture investment strategy", ADQ chief executive Mohamed Hassan Alsuwaidi said.

"We share LDC’s vision for future growth of the business, and look forward to partnering with LDC’s existing shareholders and management team to capitalise on the sector’s emerging opportunities."

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, transport, logistics, industrial, real estate, media, healthcare, financial services and agri-foods.

The company has increasingly sought to expand its food and agriculture portfolio as part of plans to strengthen the UAE's agri-foods sector, building a sustainable and diversified food supply.

Abu Dhabi is combining two food and beverage companies to create a leading F&B player in the Mena region after Agthia Group agreed to swap some of its shares to acquire date processing company Al Foah from its majority shareholder, ADQ-owned General Holding Corporation (Senaat).

In May, ADQ also agreed to acquire a 50 per cent stake in Al Dahra Holding, an Abu Dhabi-based multinational animal feed and essential food commodities specialist.