(Bloomberg) -- Alwatania, the largest poultry producer in the Middle East, is exploring a sale of the company, people familiar with the matter said, as Saudi Arabia’s push for food self-sufficiency makes the industry more attractive.
Alwatania has appointed BSF Capital as its adviser for a potential deal, according to the people, who asked not to be identified because the information is not public. A transaction may fetch as much as 2 billion riyals ($532 million), one of the people said.
Talks are ongoing and could still be delayed or fall apart, the people said. Representatives for Alwatania and BSF Capital didn’t respond to requests for comment.
The sale plans come as Saudi Arabia’s food industry is getting a boost as part of Crown Prince Mohammed Bin Salman’s massive economic overhaul. The drive to secure food supply has taken on an even bigger role after the Covid-19 pandemic and the war in Ukraine disrupted supply chains and sent prices to record highs.
The Saudi industry has already had a deal with Brazilian chicken exporter BRF SA through its joint venture with the kingdom’s Public Investment Fund, picking up a stake in a regional poultry firm. Poultry and dairy firm Almarai Co. is expanding its businesses in the country.
The Saudi Ministry of Environment, Water and Agriculture in September said that poultry meat production reached a record 558 million kilograms in the first half of the year, around a 9% jump from a year earlier.
Alwatania was founded in 1977 by Sulaiman Al Rajhi, who also established Al Rajhi Bank with his brother. Al Rajhi Bank is the largest lender by market capitalization in the kingdom and one of the biggest Islamic banks globally. The Al Rajhi family is among Saudi Arabia’s wealthiest non-royals.
The company processes over 1 million birds and 1.5 million eggs per day, according to its website. In contrast, the biggest poultry producer in the world, JBS SA, processes 4.4 billion chickens a year.
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