Saudi Arabia’s largest private agriculture company, Almarai, and U.S. agribusiness Archer Daniels Midland Co. are reportedly among companies eying Saudi Grains Organization’s (SAGO) milling operations, the kingdom’s sole supplier, according to an exclusive report by Reuters.
The state-owned SAGO handles the Kingdom’s grains purchases, and is one of the world’s largest wheat and barley buyers. The company is preparing to sell off its milling operations by placing them in four specially formed corporate entities while retaining other functions, Reuters reports.
SAGO is expected to be among the first to conduct asset sales as part of a wider push toward privatization under the Kingdom’s Vision 2030 plan.
The potential U.S.-Saudi joint bid for the milling operations is expected to have competition from other international companies.
Saudi Arabia’s Almarai is frequently referred to as one of Saudi Arabia’s most successful enterprises. Founded 40 years ago as part of a Saudi-Irish joint venture, it is the largest vertically integrated dairy company in the Middle East and the biggest food producer in the GCC. Prince Sultan bin Mohammed bin Saud Al Kabeer, Almarai’s 63-year-old founder and largest individual shareholder, is a billionaire, according to Bloomberg. In 2013, his 28.6 percent stake in the operation, plus other investments, helped him amass a fortune of at least $2.8 billion, according to the Bloomberg Billionaires Index.
Chicago, Illinois-based ADM has a market capitalization of $25 billion.
In 2016, Saudi Arabia lifted a lengthy four-year ban on US beef imports that followed a scare over Mad Cow disease in 2012, and also lifted a ban on American raised poultry after Saudi authorities said they were satisfied that the U.S. had controlled Avian Influenza. The Kingdom also said it would completely phase out all wheat production and rely solely on imports by the end of last year.