(Bloomberg) -- Saudi Arabia is accelerating its expansion into the global food industry with a pact to buy shares of BRF SA, Brazil’s biggest poultry producer.
It’s the latest in a series of recent moves by Saudi Arabia to curb food imports, diversify its economy and reduce its reliance on oil — all pillars of Crown Prince Mohammed Bin Salman’s Vision 2030 strategic plan. The kingdom has ramped up its push into agriculture after the Covid-19 pandemic and Russia’s invasion of Ukraine sent food prices to a record, upended trade flows and laid bare the fragility of the world’s supply chains.
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State-owned Saudi Agricultural and Livestock Investment Co., known as Salic, and Brazil’s Marfrig Global Foods SA agreed to purchase as much as $890 million in new BRF shares. The transaction will give Salic a stake of between 10% and 15%.
“Saudi Arabia has been BRF’s largest chicken importer in recent years, accounting by around 7% its total sales,” Leandro Fontanesi, an analyst at Bradesco BBI, said Wednesday in a report.
The desert nation, which sources most of its food from abroad, has embarked on an agricultural deal spree in recent years after Salic purchased a majority stake in the former Canadian Wheat Board in 2015.
In December, Salic bought a $1.24 billion stake in Singapore-based agricultural trader Olam Agri Holdings. A month earlier, the Saudi firm agreed to buy a 9.2% stake in Indian rice producer LT Foods Ltd. Salic has also partnered with Brazilian meatpacker Minerva SA to acquire slaughterhouses and a lamb processor in Australia after buying farmland there.
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