Agthia’s board approves merger with Al Foah to create food and beverage giant

Al Foah Company is the world’s largest dates processing and packaging company based in Abu Dhabi

The board of Agthia, the Abu Dhabi food and beverage company that owns the Al Ain Water brand, approved the merger with Al Foah. Delores Johnson / The National

The board of Agthia, the Abu Dhabi food and beverage company that owns the Al Ain Water brand, approved a merger with Al Foah, the world’s largest date processing and packaging company.

"We see the transaction with Al Foah as a key enabler to accelerate our ambitions, bringing together two UAE leaders in their respective food and beverage product categories to create one of the top 10 consumer F&B players in the MENA region by revenue," Alan Smith, chief executive of Agthia Group, said in a statement on Monday.

The development comes 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 Al Foah last month.

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.

Senaat is the sole shareholder of Al Foah.

“We expect the deal to be immediately accretive to Agthia’s shareholders with its significantly value-enhancing potential," Mr Smith said. "It will serve to further strengthen the company’s balance sheet, offering multiple revenue and cost synergies as well as the potential for further international expansion in the fast-growing date market.”

Founded in 2005, Al Foah sells an average of over 108,000 metric tonnes of dates annually. It exports to 45 countries around the world including India, Indonesia and Bangladesh.

Agthia is also considering international merger and acquisition opportunities to expand its operations, Mr Smith told The National in an interview earlier this month.

“Internationally, what we want to do in the big, regional markets where we have a footprint but we are under-scaled [is to] to buy scale,” he said.

“Egypt and Saudi [Arabia] are big markets, so we are obviously taking a closer look there.”