ADQ secures supply of agricultural goods after signing deal to buy 45% of Louis Dreyfus unit

Louis Dreyfus Company Holdings agreed to sell a 45 per cent stake in its agricultural trading unit, Louis Dreyfus Company, to Abu Dhabi’s ADQ.

LDC also signed a long-term commercial agreement with ADQ to supply agricultural commodities to the UAE.

“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, the billionaire chairwoman who owns 96 per cent of the holding company.

“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.”

Once the deal is completed, a portion of the proceeds, amounting to at least $800 million, will be invested in LDC. Money will be used to repay a $1.05bn loan to its parent company, LDC told Bloomberg.

LDC will leverage on global consumption trends to invest in new opportunities as it becomes an increasingly integrated food, feed, fibre and ingredients entity, said group chief executive Michael Gelchie.

“The investment potential created by the long-term partnership with ADQ brings additional strength to the pursuit of LDC’s strategic growth plans, building on the strong performance delivered in the first half of 2020,” he said.

LDC is one of the world’s top brokers and processors of agricultural goods. It trades a range of commodities including grains, oilseeds, coffee, cotton, juice, rice and sugar.

The company is active in more than 100 countries and employs about 18,000 people around the world.

The LDC deal “represents a strategic investment opportunity in line with our long-term food and agriculture investment strategy”, ADQ chief executive Mohamed Alsuwaidi said.

“We share LDC’s vision for the 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,” he said.

ADQ is one of the biggest holding companies in the Gulf. It was set up in 2018 and holds government stakes in companies in key sectors of Abu Dhabi’s non- oil economy such as tourism and hospitality, aviation, transport, logistics, industrial, property, media, health care, agri-foods and financial services.

The company has increasingly sought to expand its food and agriculture portfolio to strengthen the UAE’s agri-foods sector and ensure sustainable and diversified food supply.