Riyadh – Mubasher: National Agricultural Development Company (NADEC) posted that it has signed a six-month term non-binding memorandum of understanding (MoU) with Al Safi Danone Company Limited (ASD).

This MoU aims to study the possibility of merging both companies’ businesses through NADEC’s acquisition of all ASD’s shares, according to a filing to the Saudi Stock Exchange (Tadawul) on Sunday.

Additionally, the proposed transaction includes issuing new shares in NADEC to ASD’s existing shareholders by increasing NADEC’s capital, NADEC added.

As per the agreement, current shareholders in ASD will own 38.75% of NADEC’s issued share capital after completing the proposed transaction.

Both firms agreed to an exclusivity period, in which they will carry out financial, commercial and legal due diligence.

This deal will be subject to a number of conditions including, the entry into definitive agreements, the approval of NADEC’s extraordinary general meeting (EGM), and the approval of ASD’s shareholder, as well as the approval of relevant government authorities.

These negotiations between both parties do not mean the proposed transaction will be completed.  

NADEC will announce any development related to this proposed transition in due course.