Wilmar International has announced that it has entered into an agreement to dispose of its minority stake in Moroccan sugar business Cosumar.
The agreement will see Wilmar sell its entire 30.05% equity shareholding in Cosumar for an aggregate cash consideration of MAD 5.96 billion (approx. $605 million).
Cosumar’s principal business is the production of sugar through the processing of sugar cane and sugar beet in Morocco. The company is also a refiner of imported raw sugar and a distributor of sugar products.
The carrying value of the investment in Cosumar in Wilmar’s books was $336.2 million as of 31 December 2022. The completion of the transaction, targeted to happen in the fourth quarter of 2023 at the latest, is subject to regulatory approvals.
In the same agreement, Wilmar has agreed to make two acquisitions. The agribusiness company will acquire Cosumar’s 45% enquity interest in Wilmaco for a total cash consideration of MAD 85 million (approx. $8.7 million) which will result in Wilmaco becoming a wholly owned subsidiary of Wilmar.
Wilmaco’s principal business is the production, development, processing, importing, exporting and marketing of vegetable fats and their byproducts. The construction of its specialty fats facility in Morocco is ongoing and expected to complete in the fourth quarter of 2023.
Wilmar will also acquire Cosumar’s 43.28% equity interest in Saudi Arabian sugar importer and distributor, Durrah Advanced Development, for a total cash consideration of SAR 243 million (approx. $64.7 million), increasing its existing 5% equity interest in the company. The balance 51.7% interest in Durrah is held by local Saudi investors.
The Wilmaco and Durrah transactions are subject to terms to be agreed in definitive agreements, set to be finalised by September 2023. Wilmar said that when completed, the deals will not have a “significant financial impact” on the company.
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