Saudi Arabia: The Completion of the Privatization of the Second and Fourth Milling Companies

The National Center for Privatization and PPP (NCP) and the Saudi Grains Organization (SAGO) announced the sale of the Second Milling Company and Fourth Milling Company to qualified strategic investors on Tuesday July 13th, 2021  as part of the final stage of the flour milling sector privatization. The formal signing of the Share Purchase Agreement took place at the Ministry of Environment, Water and Agriculture (MEWA) headquarters in Riyadh, in the presence of  H.E. Eng. Abdulrahman A. Al-Fadley the Minister of Environment, Water and Agriculture, the Chairman of the Board of Directors of SAGO, the Chairman of the Privatization Supervisory Committee for the environment, water and agriculture sectors, and a member of the Board of Directors of NCP.

The award of each milling company was decided based on the highest financial bids submitted by qualified strategic investors, which were thoroughly reviewed to ensure adherence to the terms stipulated in the request for proposal for the first and second batch of privatizing the flour milling sector.

The flour milling sector represents one of the targeted sectors for full privatization under Saudi Arabia’s Vision 2030. The privatization of the flour milling sector is supported by specialized regulatory and executive authorities led by the Ministry of Environment, Water and Agriculture, the Ministry of Finance, the NCP, and other related entities.

SAGO, the regulator of the milling sector and main importer and supplier of wheat to the milling companies in the Kingdom, wishes the winning consortiums a successful endeavor in managing the awarded companies and attaining the desired outcomes of the privatization.

The sale of the four milling companies to the private sector aims to further strengthen the capabilities of the sector, enhance performance, support diversification of products while maintaining quality. As a result, this privatization will improve services provided to citizens and yield employment opportunities through increased contribution of the private sector towards a thriving and sustainable economy. It’s worth noting that the sale of the second batch will, upon completion, transfer the ownership of the Second Milling Company to the consortium comprised of Abdulaziz AlAjlan Sons Co. for Commercial and Real Estate Investments, Sulaiman Abdulaziz AlRajhi International Co., NADEC, and Olam International Limited pursuant to its submitted bid amounting to SAR 2,138,000,000, which constitutes the highest financial bid submitted to this company, and transferred the ownership of the Forth Milling Company transferred to the consortium comprised of Allana International, Abdullah Al Othaim Markets, and United Feed Manufacturing Company pursuant to its submitted bid amounting to SAR 859,000,000, which constitutes the highest financial bid submitted for this company.

It is worth noting that HSBC Saudi Arabia is acting as the sole financial advisor on the Privatization with support from NCP.

SAGO

Tags: Saudi Arabia, NCP, grain