Saudi Arabia's Almarai, the biggest dairy company in the Middle East, is buying Binghatti Beverages Manufacturing's production facility in the UAE for Dh215 million ($58.54m) as it continues to expand its product range.
The transaction, which is subject to obtaining certain regulatory approvals, will be fully financed from Almarai's operating cash flows, the company said in a statement on Wednesday to the Tadawul stock exchange, where its shares trade.
“This acquisition will enhance Almarai’s ability to serve its customers by expanding the range of beverage products in the region.”
Binghatti Beverages is part of Dubai-based Binghatti Holding, which operates in multiple sectors including real estate, hospitality, consumer goods and construction, among others. The value of its real estate portfolio exceeds Dh3.5 billion in value, according to the company's website.
Almarai has been on an acquisition spree to diversify its product range as the Middle East region sharpens its focus on food security.
Last month, Almarai's subsidiary Western Bakeries Company bought an additional stake in Riyadh-based snacks maker Modern Food Industries for 150m Saudi riyals ($40m).
Following the deal, Western Bakeries Company’s stake in Modern Food Industries rose to 75 per cent, Almarai said on May 9.
Almarai also acquired Bakemart's business in the UAE and Bahrain for $25.47m in March. Bakemart produces bakery items and frozen foods for the retail and hospitality industry in the Middle East. It also runs a number of its own food retail and cake shops.
Almarai's first quarter net income rose slightly to 385.9m riyals on a 1.46 per cent increase in revenue to 3.64bn riyals.
In April, the company said it spent 299.1m riyals on investment activities in the first quarter, although this was about 45m riyals lower than the same period last year before movement restrictions to stem the spread of Covid-19 were enforced.
Other food and beverage companies across the region are also increasingly evaluating acquisitions to drive growth and boost profit.
Abu Dhabi’s Agthia Group, one of the region’s top food and beverage companies, recently completed its merger with date-processing company Al Foah.
Agthia also bought Kuwait’s Al Faysal Bakery and Sweets as well as stakes in Jordan-based processed meat producer Nabil Foods and Egypt's Ismailia Investments to expand its footprint across the region.