Saudi NADEC agrees to acquire dairy competitor

DUBAI, Mar 25 (Reuters): Saudi Arabia's National Agricultural Development Co (NADEC) has agreed to buy Al Safi Danone Company (ASD) in a deal that will help boost its business in the dairy industry in the kingdom and extend its geographic reach, it said on Sunday.

ASD, a producer of dairy and juice products, is a joint venture between Saudi Arabia's Al Safi Group of Companies and French food company Danone. The value of the transaction was not disclosed.

The combination is an example of an M&A deal in a private sector that the government hopes will play an increasing role in diversifying the economy away from a reliance on oil revenues.

NADEC has a market capitalisation of 3.2 billion riyals ($853 million), slightly smaller than that of Saudia Dairy & Foodstuff Company. Both are dwarfed by Almarai, the Gulf's largest dairy company, which has a market capitalisation of 54.4 billion riyals.

NADEC said the move would help it develop a broader portfolio and enhance its regional reach outside the kingdom in the United Arab Emirates, Kuwait, Bahrain, Jordan and Lebanon, in addition to new countries such as Iraq and Oman.