Louis Dreyfus sells large stake to Abu Dhabi-based ADQ

Global agribusiness Louis Dreyfus Company (LDC) has agreed to sell a large stake in the company to Abu Dhabi-based holding company ADQ, the companies announced on 11 November.

The main Louis Dreyfus Company Holdings BV (LDCH) business would sell a 45% equity stake in the LDC unit, the companies said.

This would be the first time in the private company’s 169-year history that it would operate with ownership outside the family, World Grain said in its 11 November report on the transaction.

“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,” said Margarita Louis-Dreyfus, chairperson of the supervisory board of LDCH.

“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.”

The transaction price was not disclosed but the companies said a minimum of US$800M would be invested into LDC.

ADQ’s portfolio covers multiple sectors, including food and agriculture. As part of its strategy for the sector, the company was aiming to generate financial returns and strengthen the economic cluster in the UAE.

“As one of the world’s leading agri-commodities and food companies, LDC represents a strategic investment opportunity for ADQ, in line with our long-term food and agriculture investment strategy,” said HE Mohamed Hassan Alsuwaidi, CEO of ADQ.

As part of the agreement, ADQ would sell agricultural commodities to the United Arab Emirates, LDC said.

LDC Group CEO Michael Gelchie said the company’s strategy was to “leverage global consumption trends through investments in new business opportunities, as the company embraces more of the agricultural value chain to become an increasingly integrated food, feed, fibres and ingredients company.”

Completion of the agreement was subject to customary closing conditions, including regulatory approvals.

In the first half of 2020, LDC had reported strong earnings – net sales of US$16.3bn – against a backdrop of global challenges including COVID-19, trade tensions and market uncertainty, according to a report by World Grain.

Along with US-based Archer Daniels Midland (ADM), Bunge and Cargill, LDC is a major player in world agricultural commodity trading including edible oils and oilseeds.

Established in Abu Dhabi in 2018, ADQ’s portfolio also includes energy and utilities healthcare and pharma, and mobility and logistics.

ADQ said the investment in LDC further strengthened its food and agri portfolio including Silal, which aims to diversify food sources and increase locally-grown, raised and manufactured food.

Earlier in 2020, ADQ also signed an agreement to acquire a 50% share Al Dahra Holdings, a multinational company specialising in animal feed and food commodities.

“Food and agriculture is an attractive, core sector for ADQ to generate financial returns and strengthen the economic cluster locally,” ADQ’s CEO Alsuwaidi said.

“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.”