DUBAI, Oct 6 (Reuters) - Abu Dhabi plans to combine two food
and beverage companies to create a new national champion in the
sector, as part of consolidation efforts in the oil-rich emirate
led by ADQ, a state-owned holding company.
Industrial conglomerate Senaat, owned by ADQ, has submitted
a non-binding offer to the board of Agthia Group, an
Abu Dhabi-listed food company, to transfer the majority of Al
Foah Company into Agthia, ADQ said on Tuesday.
Al Foah, owned by Senaat, 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 10 consumer F&B players in the MENA region," ADQ said
in a statement.
The combined entity would become a "domestic champion" in
water, dates, flour, and animal feed, it said.
According to the proposal, Senaat would transfer the entire
issued share capital of Al Foah to Agthia in exchange of a
convertible instrument issued by Agthia to Senaat and
convertible into 120 million ordinary shares of Agthia after the
transaction is closed.
The price at which the convertible instrument will convert
would be 3.75 dirhams per share, implying an equity value of 450
million dirhams ($122.52 million) for Al Foah, ADQ said.
After the transaction, Senaat would own 59.17% of the entire
issued share capital of Agthia, up from the 51% it currently
ADQ, which was established in 2018, owns strategic assets
such as Abu Dhabi Ports, Abu Dhabi Airport and bourse operator
ADX. It has also built up a portfolio of food and agriculture
businesses and recently took a 22% stake in Dubai-based courier
Abu Dhabi has seen some of its largest firms merge in the
last few years in response to an earlier oil price slump.
Efforts have intensified this year, with deals including the
consolidation of two Abu Dhabi utilities under ADQ and the
combination of national contracting firms in the oil and gas
($1 = 3.6728 UAE dirham)
(Reporting by Davide Barbuscia; Editing by Kim Coghill)