ADQ enters agreement to acquire stake in Louis Dreyfus Company

Nov 11, 2020

News

  • Investment in leading global merchant and processor of agricultural goods will further strengthen ADQ’s food and agriculture investment portfolio and help accelerate strategic investments across LDC's value chain
  • Long-term partnership between ADQ and LDC is expected to bring additional strength to the pursuit of LDC's strategic growth plans

ADQ, one of the region’s largest holding companies with a broad portfolio of major enterprises spanning key sectors of Abu Dhabi’s diversified economy, announced today that it has signed an agreement to acquire an indirect 45 percent equity stake in Louis Dreyfus Company B.V. (LDC), a leading global merchant and processor of agricultural goods. As part of this transaction, LDC also signed a long-term commercial supply agreement with ADQ for the sale of agri-commodities to the United Arab Emirates (UAE).

As one of the world’s top global players in the agri-commodities sector, LDC is engaged in sourcing, processing, storing, transporting and merchandising agricultural commodities worldwide, thanks to its diversified portfolio and global presence. LDC posted net sales of US$16.3 billion and EBITDA from continuing operations of US$634 million for the first half of 2020.

Upon completion of the transaction, a portion of the proceeds amounting to a minimum of US$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 across the value chain, as the company evolves from its traditional role as an agri-commodities merchant to become an increasingly vertically integrated food, feed, fibres and ingredients company. Completion of the agreement is subject to customary closing conditions, including regulatory approvals.

H.E. Mohamed Hassan Alsuwaidi, CEO of ADQ, said: "Food and agriculture is an attractive, core sector for ADQ to generate financial returns and strengthen the economic cluster locally. As one of the world’s leading agri-commodities and food companies, LDC represents a strategic investment opportunity for ADQ. With a diversified agri-commodity portfolio, significant scale and broad geographic footprint, LDC will further accelerate the progress we have already made this year in significantly expanding ADQ’s food and agriculture portfolio."

His Excellency added: "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 by accelerating LDC’s transformative growth strategy to move towards greater value chain integration – from producers to consumers."

Margarita Louis-Dreyfus, Chairperson of the Supervisory Board of Louis Dreyfus Company Holdings B.V., commented: "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. 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."

Ms. Louis-Dreyfus, added: "LDC will continue to leverage its core historic capabilities to efficiently analyze and capture opportunities in a rapidly changing context, while pursuing our vision to shape resilient global food supply chains, guided by our purpose to create fair and sustainable value for the benefit of current and future generations. As we embark on the next stage of LDC's development, we look forward to working with ADQ toward the realization of that shared vision."

The investment in LDC further strengthens ADQ’s food and agri portfolio including Silal, which aims to diversify food sources and increase locally grown, raised and manufactured food; Agthia, which is one of the region’s leading food and beverages companies; and Al Foah, which specialises in date production and processing.  Earlier this year, ADQ also signed an agreement to acquire a 50 percent of Al Dahra Holdings, a multinational agribusiness leader that specializes in animal feed and essential food commodities.

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