Olam International (VC2) Investor Update summary

Transaction overview and structure

• Olam will sell its remaining 64.57% stake in Olam Agri to SALIC in two tranches, completing a 100% divestment.

• Tranche 1 involves a 44.58% stake sold for US$1.78 billion, with SALIC holding 80.01% and Olam retaining 19.99%.

• Tranche 2 covers the sale of the final 19.99% within three years via put/call options at closing valuation plus 6% IRR, raising up to US$800 million, potentially growing to ~US$1 billion with interest.

• Total gross proceeds from all tranches, including the 2022 sale, are expected to reach US$3.87 billion.

• Completion of Tranche 1 is subject to shareholder and regulatory approvals, targeted for Q4 2025.

Valuation and financial impact

• Olam Agri is valued at US$4.0 billion, a 14% premium to the 2022 transaction and 23% above Olam Group's market cap.

• The valuation equates to a 3.47x book value at end-2023.

• Estimated gain on disposal from Tranche 1 is US$1.84 billion, with total gain from full divestment projected at US$2.72 billion.

• Permitted dividend leakage of up to US$110 million for H2 2024, representing 50% of Olam Agri's earnings.

• Board will consider debt repayment, capital structure optimization, growth, and a possible special dividend when allocating proceeds.

Strategic rationale and future direction

• The transaction is a key milestone in Olam's 2020 reorganisation, unlocking value and enabling focus on remaining businesses and a potential ofi IPO.

• Olam Agri's differentiated model, focus on emerging markets, and sustainability leadership underpin its strong growth and capital efficiency.

• Olam Agri will remain an independent, IPO-ready entity with minimal changes to management and governance.

• SALIC's resources and government relationships are expected to catalyze further growth, synergies, and food security objectives, especially in Saudi Arabia, Africa, and Asia.

• No immediate plans to change Olam Agri's name or relocate headquarters from Singapore; future decisions will align with business needs.