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Savola takes full control of sugar, oil unit

Riyadh, August 23, 2010

Saudi-based Savola Group will take full control of its edible oil and sugar affiliate and boost its control over the retail business after a planned new share swap with family-owned Al-Muhaidib Group.

Savola also said its board agreed to name as new chairman Sulaiman Al-Muhaidib -- who also chairs Al-Muhaidib Group -- to replace Adil Fakieh, recently appointed as new labour minister.

The transaction will make Al-Muhaidib Group Savola's biggest shareholder with a 14.8 percent stake. Al-Muhaidib Group currently holds a 8.4 percent stake in Savola.

Savola will issue the equivalent of 7.5 percent of its capital in new shares -- or 37.63 million shares -- to take from Al-Muhaidib a 10 percent stake in Savola Foods and 18.6 percent in Azizia Panda United.

According to its financial statements for the second quarter, Savola held a 90 percent stake in Savola Foods and a 74.4 percent stake in retail chain Azizia Panda United.   

Based on Sunday's closing share price, the two transactions would cost 1.24 billion riyals ($330.2 million). Shares in Savola rose by as much as 2.1 percent after the announcement.

If approved by regulators, the proposed deal will be Savola's second with Al-Muhaidib since 2008 when they agreed to a share swap deal that allowed Savola to take the former's Giant Stores retail chain.-Reuters




Tags: Savola | Sugar | edible oil | Al-Muhaidib Group |

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